CA Inter P1 · Chapter 10 · Question 1 of 10
Under section 68 of the Companies Act, 2013, a company may buy back its shares with the authorisation of only its board of directors (without a special resolution) provided the buyback does not exceed:
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: C) 10% of the total paid-up equity capital and free reserves
Explanation
Section 68 permits a buyback authorised by a board resolution passed at a meeting if the buyback is 10% or less of the total paid-up equity capital and free reserves. For a buyback up to 25%, a special resolution of the shareholders is required.
More Buyback of Securities MCQs
- Q3Case: After a proposed buyback, Harsha Ltd will have secured and unsecured debt of ₹3,60,00,000. Assuming no higher ratio has been…
- Q4Case: Ishita Ltd bought back 50,000 equity shares of ₹10 each at ₹40 per share, wholly out of its securities premium and general reserve…
- Q5Case: Jatin Ltd buys back 1,00,000 equity shares of ₹10 each at ₹15 per share. To part-finance the buyback, it issues 10% preference…
- Q6Which of the following is NOT a permitted source for financing a buyback of equity shares under section 68?
- Q7Case: Kaustubh Ltd has 8,00,000 fully paid equity shares outstanding. Under section 68, the maximum number of equity shares it can buy…