urgent technical query

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Guest

Guest (Querist)

26 August 2009 A private non listed company of my relative , had sold its shares of rs 300000 last year to increase its capital .
now it wants to purchase it back from the same party. please tell me and advise on the best and safest way to do that .... please suggest the right way which companies practice in inida...

regards
shobhit

M Prabhakar Menon

M Prabhakar Menon (Expert)

26 August 2009 First of all to increse capital u dont sell shares u allot them to persons who have applied for them.
Secondly the company's Articles of Asociation should allow the company to buy back its own shares, if no such clause is there u will have to get it inserted in the AoA.
The shares once issued to a shareholder is like any comodity in the market that can be bought and sold for its price, negotiate with the person whose shares u intend to purchase and submit the Share Certificates along with Share Transfer Form to the Comnpany for recording the transfer This way the paid up capital will not get reduced If u wish to reduce the capital the procedure is different

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CS SIDDHARTHA BANIK

CS SIDDHARTHA BANIK (Expert)

26 August 2009 For buy back of shares of pvt. Ltd. Co. please go through the â€˜Pvt. Limited Company and Unlisted Public Limited Company (Buy Back of Securities) Rules, 1999 and the procedure accordingly.

Thanks,
CS Siddhartha Banik

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