Buy Back of Securities is a boon for Companies who wants to reduce their Share Capital. First of all, here are few preliminary notes of Buy Back: It must be signed by 2 directors, 1 of whom must be managing director, if any. If buy back is done out of Free Reserves, amount equivalent to the Nominal Value of the shares bought back shall be transferred to Capital Redemption Reserve.

Buy Back of shares under the Companies Act,

Security Premium can also be used for the same. Details of such transfer shall be disclosed in the balance sheet as referred to in the section 80 1 d.

The Buy Back Rules, has not defined any basis of Valuation for Buy Back Price. Therefore Company is free to make valuation of buy back price on any relevant basis. Such relevant basis can be:. Company has to give full disclosure of such method adopted in Explanatory Statement and in the Offer Letter.

The notice of the meeting at which Special Resolution is proposed to be passed shall be accompanied by an explanatory statement stating all the details regarding buy back of shares viz:. The date of Board meeting at which the proposal for buyback was approved by the Board of Director of the Company. The maximum required under the buy-back and the sources of funds from which the buy-back would finance. The aggregate of shareholding of promoter and the director as on the date of the notice convening the General Meeting.

Aggregate number of equity shares purchased or sold by persons including promoter and director during a period of 6 Months preceding the date of Board Meeting at which buy back was approved form the date of the notice convening the General Meeting.

The maximum and minimum price at which purchase and sales referred to above made along with the relevant date.

Intention of the promoter and person in control of the Company to tender shares for buy-back indicating the number of shares, detail of acquisition with date and price; Procedural Checklist for Buying Back shares of an unlisted company. A confirmation that there is no default subsisting in repayment of deposits, redemption of debenture or preference shares or repayment of term loan to any financial institution or banks.

A confirmation that the Board of Directors has made full enquiry into the affairs and prospects of the Company. If promoters intend to offer their shares the quantum of shares proposed to be tendered and details of their transaction and their holding for the last six months prior to the passing of the Special Resolution. Details of the offer including the total number and percentage of the total paid up capital and free reserves proposed to be bought back and price.

The proposed time table from opening of the offer till the extinguishment of the certificates. A full and complete disclosure of all material facts including the contents of the explanatory statement annexed to the notice for the general meeting at which the special resolution approving the buy back was passed.

The minimum and the maximum number of securities that the company proposes to buy-back, sources of funds from which the buy-back would be made and the cost of financing the buy-back.

Audited Financial information for the last 3 years and the company and its Directors shall ensure that the particulars audited statement and un-audited statement contained therein shall not be more companies buy back of shares rules 1999 6 companies buy back of shares rules 1999 old from the date bank of america stock market crash the offer document together with financial ratios as may be specified by the Board; Procedural Checklist for Buying Back shares of an unlisted company.

Buy Back Shares: Meaning, Reasons, Aspects and Other Details

Present capital structure including the number of fully paid and partly paid securities and shareholding pattern. The capital structure including details of outstanding convertible instruments, if any, post buy-back.

The aggregate shareholding of the promoter group and of the directors of the promoters, where the promoter is a company and of persons who are in control of the company. The aggregate number of equity shares purchased or sold forex adr strategy persons mentioned in clause 12 above during a period of twelve months preceding the date of the public announcement and from the date of public announcement to the date of the letter of offer; the maximum and minimum michiyo ho forex at most stolen library book stock market purchases and sales referred to above were made alongwith the relevant date.

Redemption of debentures or preference shares or repayment of a term foreign exchange rate bkk bank to any financial institutions or banks.

Companies Ordinance Pakistan: BUY BACK OF SHARES BY COMPANIES IN PAKISTAN

Issue of notice with Explanatory Statement along with disclosures mentioned below to all members. Offer for buy back shall remain open to the members for a period not less than 15 days and not exceeding 30 days from the date of dispatch of letter of offer. This levy is mandatory irrespective of whether the company is liable to tax or not on its income.

The difference if any will be credited to Profit on Sale of Investment Account or debited to Loss on Sale of Investment Account which in turn will be transferred to Profit and Loss Account. This was a brief summary of Buy Back. For any query, please mail me at info onlinelawsolutions. Online classes for CA CS CMA. Alternatively, you can log in using: Registered members get a chance to interact at Forum, Ask Query, Comment etc. Member Strength and growing. Home Articles Corporate Law.

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Jobs Career Corner Feed E-mail Events Students Notifications. Verification of offer to be completed. Submit a certificate to ROC duly verified by: NO Since here payment is made as per Section 77A of Companies Act and not from accumulated profits. Subscribe Articles on Email Submit.