Buy Back of Shares

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Shikha Anand (Querist)
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28 October 2010 Hi fellow colleagues

My Company is undergoing buy back process. Since this not a normal practice with companies so i wud want some guidance on this. Could you please tel me what shall be the after effect of buy back on my share capital? wil it be reduced?? I am confused with this.

CS vanita

CS vanita (Expert)
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28 October 2010 Yes. Buy back has the effect of capital reduction.

CS Nikita Sheth

CS Nikita Sheth (Expert)
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28 October 2010 Hey I dont agree with Cs Vanita

Since for the reduction of share capital there r some special sections in Companies Act,1956 i.e. section 100-105\

Buy back of shares will not amount to reduction of share capital so the company need not have to follow the stringent provisiions of section 100

CS vanita

CS vanita (Expert)
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29 October 2010 I didn't say that we have to follow the procedures of Section 100-105 for buy back but what i meant was the shares bought back has the effect of reduction of share capital.

Shikha Anand

Shikha Anand (Querist)
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02 November 2010 thnks guyz!!

udit sharma

udit sharma (Expert)
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03 November 2010 I agree with Vanita completely.....

Effect of buy back of shares will be reduction in the paid up share capital of the Company..... though you do not have to follow the procedure prescribed for reduction of share capital prescribed under section 100 of the Companies Act, 1956

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