sec 77(i) restricts company limited by shares shall not have power to buy own shares.
But 77A has given the power to purchase its own securities.
I am confused in these sections.any one can clarify this
sec 77(i) restricts company limited by shares shall not have power to buy own shares.
But 77A has given the power to purchase its own securities.
I am confused in these sections.any one can clarify this
CS Ankur Srivastava
(Company Secretary & Compliance Officer)
(17848 Points)
Replied 07 May 2009
Dear Friend,
Section 77(1) prohibits the companies from purchasing its own shares or specified securities unless the consequent reduction of capital is effected and sanctioned in pursuance of section 100 to 104 or 402.
Further, buy back results reduction of capital, but it does not requires Court approval.
Further Section 77A permits companies to buy its own shares or specified securities and this section has overriding effect of all the provisions contained in this Act.
Ankur Garg
(Company Secretary and Compliance Officer)
(114773 Points)
Replied 07 May 2009
To add further Section-77 is in the nature of restriction and not in the nature of Prohibition.
Further as mentioned by Ankur Section-77A is a specific section specifically allowing buyback by companies subject to the fulfillment of its provisions.
In case of any doubt plz post it.
Regards
Ankur Garg
(Company Secretary and Compliance Officer)
(114773 Points)
Replied 11 May 2009
Thanks for appreciation.
CAclubindia
