Frequently Asked Question
a) Public offer through issue of prospectus
b) Private Placement/ Preferential allotment
c) Issue of shares to employees under a scheme of employees stock option
d) Right issue/ bonus issue
a) Right issue/ bonus issue
b) Issue of shares to employees under a scheme of employees stock option
c) Issue of shares to any person through preferential allotment/ private placement.
"Buy Back" is a process by which a company purchases its own shares or other specified securities by following the procedures specified in Section 68 of the Companies Act, 2013. The company can utilize free reserves, securities premium account or proceeds of the issue of fresh issue shares or other specified securities to purchase its own shares.
As per the provisions of Section 68(2) of the Companies Act, 2013, the company can buy back shares not exceeding 25% of the aggregate of paid-up capital and free reserves of the company by passing a special resolution at the general meeting and in case of buy back of equity shares in any financial year, it should not exceed 25% of its total paid-up equity capital in that financial year.
As per the provisions of Section 68(2) of the CA, 2013, a company cannot buy back its shares if it is not authorized by its AOA. First AOA needs to be altered.
As per the provisions of Section 68(4) of the CA, 2013, every buy back shall be completed within a period of one year from the date of passing of the special resolution or resolution passed by the Board, as the case may be.
Automatic Route: Foreign Investment is allowed under the automatic route without prior approval of the Government or the Reserve Bank of India, in all activities/ sectors as specified in the Regulation 16 of FEMA 20(R).
Government Route: Foreign investment in activities not covered under the automatic route requires prior approval of the Government.
1. Advance Remittance Form (ARF): An Indian company which has received amount of consideration for issue of capital instruments and where such issue is reckoned as Foreign Direct Investment under FEMA 20(R), shall report such receipt (including each upfront/ call payment) in ARF to the Regional Office concerned of the Reserve Bank, not later than 30 days from the date of receipt.
2. Reporting of issue of capital instruments in Form FC-GPR to the Regional Office concerned of the Reserve Bank under whose jurisdiction the Registered office of the company is situated.
3. Form FCTRS is required to be filed for transfer of capital instruments by way of sale in accordance with FEMA 20(R), between: (i) a person resident outside India holding capital instruments in an Indian company on a repatriable basis and person resident outside India holding capital instruments on a non-repatriable basis; and (ii) a person resident outside India holding capital instruments in an Indian company on a repatriable basis and a person resident in India, The onus of reporting is on the resident transferor/ transferee or the person resident outside India holding capital instruments on a non-repatriable basis, as the case may be.
4. Annual Return to RBI for Foreign Assets and Liabilities of Indian Company.