TMI BlogPower of company to purchase its own securitiesX X X X Extracts X X X X X X X X Extracts X X X X ..... her specified securities shall be made out of the proceeds of an earlier issue of the same kind of shares or same kind of other specified securities. (2) No company shall purchase its own shares or other specified securities under sub-section (1) unless ___ (a) the buy-back is authorised by its articles; (b) a special resolution has been passed in general meeting of the company authorising the buy-back: [4] [ Provided that nothing contained in this clause shall apply in any case where (A) the buy-back is or less than ten per cent of the total paid-up equity capital and free reserves of the company; and (B) such buy-back has been authorised by the Board by means of a resolution passed at its meeting: ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ecified in clause (f) is in accordance with the guidelines as may be prescribed. (3) The notice of the meeting at which special resolution is proposed to be passed shall be accompanied by an explanatory statement stating ___ (a) a full and complete disclosure of all material facts; (b) the necessity for the buy-back; (c) the class of security intended to be purchased under the buy-back; (d) the amount to be invested under the buy-back; and (e) the time limit for completion of buy-back. (4) Every buy-back shall be completed within twelve months from the date of passing the special resolution [7] [or a resolution passed by the board] under clause (b) of sub-section (2). (5) The buy-back under sub ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d on any recognised stock exchange. (7) Where a company buys-back its own securities, it shall extinguish and physically destroy the securities so bought-back within seven days of the last date of completion of buy-back. (8) Where a company completes a buy-back of its shares or other specified securities under this section, it shall not make further issue of the same kind of shares (including allotment of further shares under clause (a) of sub-section (1) of section 81) or other specified securities within a period of [10] [six] months except by way of bonus issue or in the discharge of subsisting obligations such as conversion of warrants, stock option schemes, sweat equity or conversion of preference shares or debentures into equit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... --------------------------------- Noes:- [1] Inserted by the Companies (Amendment) Act, 1999, w.r.e.f. 31-10-1998. [2] Section 77A, 77AA and 77B inserted by the Companies (Amendment) Act, 1999, w.e.r.f. 31-10-1998. See also rule 20C e-Form 62, Companies (Central Government's) General Rules Forms, 1956. [3] See Private Limited Company and Unlisted Public Limited Company (Buy-Back of Securities) Rules, 1999. [4] Inserted by the Companies (Amendment) Act, 2001, w.r.e.f. 23-10-2001. [5] Dept-equity ratio for listed Housing Finance Companies shall be such as may be specified by National Housing Bank in consultation with Central Government. [Rule 5C(4), Companies (Central Government's) General Rules and F ..... X X X X Extracts X X X X X X X X Extracts X X X X
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