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V.S. Datey on Companies Act, 2013
  • Price for buyback

    by Thiruppathi on Tuesday, May 07, 2019 at 10:28 AM

    Sir, A private limited wish to buy back its own shares at a price of Rs.10/-(face value) per share. However its books value as on the date of offer for buyback is Rs.200/-. The offer for buyback will be made on proportionate basis to the existing share holder and other conditions & procedures as mentioned in Sec 68 and related rules will be complied with. The share holder will accept the offer. Is there any non-compliance with respect to provisions of the Companies Act. Please advice.

    Replied byV.S. Datey Tuesday, May 07, 2019 at 05:06 PM

    purely from company law point of view, there does not seem to be an issue - however, prima facie it is bogus transaction auditors may have to qualify it - members may face income tax issues as not arms length transaction V S datey

 
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