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buyback

Dhawal (Executive) (27 Points)

03 July 2011

Dear Expert

I have a company with share capital of 1 lac and fv of Re 1 per share.

Company has taken loan of 15 lac from its 15 shareholders. They have 1 equity share each.

Now the cmpany wants to buyback those 15 shares @ Re 8000/- each. Is it possible to do so ?

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3 Replies

praveen (Chartered Accountant) (6971 Points)
Replied 03 July 2011

I think your company is a private company. If you buyback the shares then the company's capital will be lesser than 1.00Lac which is not agreeable under the companies act 1956

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Anjaly.P.A ( Article( CA Final)) (221 Points)
Replied 03 July 2011

There are some conditions in buyback of shares.

Among them the ratio of the debt owned by the company is not more than twice the capital and free reserves of the company. Make sure whether this condition has full filled.

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Originally posted by : Anjaly.P.A
	There are some conditions in buyback of shares. Among them the ratio of the debt owned by the company is not more than twice the capital and free reserves of the company. Make sure whether this condition has full filled.