Buy back of shares
This query is : Resolved
05 December 2013
can company buy back its shares from proceeds of sale of investment? if yes then whether amount equal to nominal value of buy back shares transfer to CRR
Ajay Mishra
(Expert)
05 December 2013
As per provisions of section 77A of the Act, the buy-back of shares and securities can be made out of:—
(i) its free reserves, or
(ii) the securities premium account, or
(iii) the proceeds of any issue of shares or other specified securities other than proceeds of an earlier issue of the same kind of shares or same kind of specified securities which are proposed to be bought back.
So as per my understanding it is not possible to buy back of shares from such proceeds.
As per provisions of section 77A of the Act, the buy-back of shares and securities can be made out of:—
(i) its free reserves, or
(ii) the securities premium account, or
(iii) the proceeds of any issue of shares or other specified securities other than proceeds of an earlier issue of the same kind of shares or same kind of specified securities which are proposed to be bought back.
So as per my understanding it is not possible to buy back of shares from such proceeds.
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