Buyback of securities
This query is : Resolved
14 September 2011
As per Section 77A(1)(iii), a Company may purchase its own shares or other specified securities out of the proceeds of any shares or other specified securities.
Query :
Can a company buyback its equity shares out of the proceeds of issue of 8% optionally convertible debentures..?
Query :
Can a company buyback its equity shares out of the proceeds of issue of 8% optionally convertible debentures..?
14 September 2011
Dear Nilay Shah,
The Buyback of securities u/s 77A, we can buy back of securities with issue of new shares or debentures can be possible but not the same class or same kind.
For Eg. Taking your case, equity shares can be buy back with the help of issuing new 8% debentures and not by issue of new equity shares.
The Buyback of securities u/s 77A, we can buy back of securities with issue of new shares or debentures can be possible but not the same class or same kind.
For Eg. Taking your case, equity shares can be buy back with the help of issuing new 8% debentures and not by issue of new equity shares.
Message likes :
1 times
15 September 2011
Thanks Vignesh..
But if you issue debentures for buying back its equity shares then the company is decreasing its capital and creating a new liability.
But if you issue debentures for buying back its equity shares then the company is decreasing its capital and creating a new liability.
15 September 2011
Dear Nilay Shah,
You are issuing convertible debentures for the purpose of buy back of securities. Thus, you may get the tax benefit for the interest you provide and as well as the convertible debentures shall be included to calculate net worth. cost of servicing the equity is higher when compared with debentures. so, there is no much higher additional liability for the company.
You are issuing convertible debentures for the purpose of buy back of securities. Thus, you may get the tax benefit for the interest you provide and as well as the convertible debentures shall be included to calculate net worth. cost of servicing the equity is higher when compared with debentures. so, there is no much higher additional liability for the company.
You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now
Click here to login now
Similar Resolved Queries
Unanswered Queries
- DELIVERY GOLD & SILVER AND OTHER ETF TRADING PROFIT AS BUSINESS INCOME
- GSTR-1A How to update Invoice
- Excess salary payment.
- 3cd- cash system of accounting is allowed?
- Provision for loans that are under Revenue Recovery
- APPLICABILITYOF GST ON STUDENT HOSTEL FEES
- Form 121-contradictory opinions
- Current Account Opening for Sole Proprietorship with Udyam Certificate - Zero Turnover
- Stamp Paper for partnership firm change new income tax 2025
- TDS on Purchase of Immovable Property by NRI from NRI
- Cash gift by grand mother to her grand daughter
- Tax amount diff in Gstr1 and 3B in tax compare reports
- Tds on GST in connection with sale to public company
- Restoration of certificate of practice
- Regarding change in correspondence address in SSP portal
- No Compliences after incorporation
- USEFUL LIFE OF USED/SECOND HAND COMMERCIAL VEHICLES
- Claiming TDS deducted by builder on Hardship compensation and Corpus
- Address Change to another state of a Registered Trust with 12AB approval
- Updated return in budget 2026
Trending Online Classes
-
DT & Audit (Exam Oriented Fastrack Batch) - For May 26 Exams and onwards Full English
CA Bhanwar Borana & CA Shubham Keswani
CAclubindia
