banner_ad

Buy back of shares for a pvt.ltd company

Others 3016 views 3 replies

Can a private limited company buy back its own shares? If buy back is at face value itself, then there is no capital gain for shareholders. If that is the case, can they take the advantage of indexation and take it as Long Term Capital Loss? Or will it be beneficial for the company to declare dividend instead of going for buy back?

Replies (3)

Hi,

 

 To declaire dividend is a completely different issue altogather. the company may declaire dividend only in case there is a profit with the coampny.

About the buy back, the process is a little complex one. surely a pvt comany can buy back its shares. with regards to the capital loss in the hands of the shareholders,  yeas they can take the benifit of the same. but as a matter of fact whaich shareholder will do it is the question.. i mean look, if you as a shareholder hold a share that you had bought for Rs. 100 (including premium) and your company is willing to buy it back at Rs5 will you ake up the offer to suffer the losst?? why not instead hold the share?

i agree with the Ajinkya (lawyer)

1.There are only two directors in a Pvt.Ltd and they themselves are promoters also. They have got sufficient cash and networth requirement as per RBI norms also increased. so they want to go for buy back, and such buy back should benefit the company as well as shareholders. They bought the shares @ Rs.10 each and now the buy back is also @ Rs.10 each. Now considering the above case, can they take the advantage of indexation?

2. "Buy Back is long process".............can u please explain why it is long process? and is there any practical disadvantage in future if we go for buy back?


CCI Pro

Leave a Reply

Your are not logged in . Please login to post replies

Click here to Login / Register  

Related Topics
Loading
Company
ARTICLESHIP 27 May 2026
CA Article Trainee

Rahul Dang & Associates-Chartered Accountants

Pune

CA Inter

View Details
Company
ARTICLESHIP 31 May 2026
Article Assistant

KPRS And Associates

New Delhi

CA Inter

View Details
Company
27 May 2026
Audit Assitant

Virender K Gupta and Co

New Delhi

B.Com

View Details
Company
Featured 27 May 2026
Lead Conversion Executive / Sales Closing Executive

SMJ global advisors pvt ltd

New Delhi

B.Com

View Details
Company
10 June 2026
Senior Account Executive

JDS Advisory LLP

Ahmedabad

CA Inter

View Details
Company
01 June 2026
Audit, Taxation & Compliance Executive

R P S K & Associates

Nashik

CA Inter

View Details
Company
Featured 28 May 2026
SEMI QUALIFIED/ CA DROPOUTS/ ARTICLES

T R SOOD & CO

New Delhi

CA Inter

View Details
Company
09 June 2026
Accounts Associate

S Madan and CO

New Delhi

Graduate (Any)

View Details