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Buy back under section 77A(c) of companies act, 1956

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Buy back under section 77A(c) of companies act, 1956

Postby arunkumarcs » Tue Jun 30, 2009 4:13 pm

Hi iam arun kumar I need some clarification, hope u help me out.

As per Section 77A (c) of the companies act, 1956 a company can buy back its shares max to the extent of 25% of paid up capial and free reserves of the company.

But the following para of the same section says that :provided that the buy back in a financial year not to exceed 25% of its paid up equity capital in that financial year.
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Re: Buy back under section 77A(c) of companies act, 1956

Postby reenajain » Tue Jun 30, 2009 4:37 pm

Hi,

There are 2 limits:

1. Overall limit is 25% of paid up Cap (i.e Equity+ Preference) and Free reserves,

2. Buy Back of equity shares upto 25% ( that means you cannot buy back more than 25% of equity capital in 1 financial year,100% preference can be buy backed as long as it does not cross the overall limit)

I hope this will suffice your query.

Regards,

Reena Jain
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Re: Buy back under section 77A(c) of companies act, 1956

Postby amarkakaria » Thu Jul 02, 2009 12:01 pm

Hi Arun,

I agree with Reena's views with respect to buy-back. There's an overall ceiling at 25% of paid up capital (Equity + Preference) and Free reserves.

However, if you want to cross the limit of 25% and go for higher percentage of buy back, it can be possible after taking High Court approval.
Warm Regards,
Amar Kakaria
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