Hi all..
Sec 77A states that:
Power of company to purchase its own securities.—(1) Notwithstanding anything contained in this Act, but subject to the provisions of sub-section (2) of this section and section 77B, a company may purchase its own shares or other specified securities (hereinafter referred to as “buy-back”) out of—
(i) its free reserves; or
(ii) the securities premium account; or
(iii) the proceeds of any shares or other specified securities:
Provided that no buy-back of any kind of shares or other specified securities shall be made out of the proceeds of an earlier issue of the same kind of shares or same kind of other specified securities.
Does this mean that when we buy back shares then all the application money, share premium received from issue of equity shares since the incorporation of the Company, cannot be used for buy back of shares? Even the money received from the subscriber to the memorandum cannot be used?
Is this applicable for private company also?? Please reply... it is urgent
CAclubindia
