Buy Back of Shares Section 68

  Section 68- Power of Company to purchase its own securities:

 1. Purchase can be made out of:

•its free reserves;

•the securities premium account; or

•the proceeds of the issue of any shares or other specified securities:

2. Preliminary Conditions:

•must be authorized by its articles;

•a special resolution has been passed at a general meeting of the company authorizing the buy-back, but the same is not required when:

•i. The buy-back is 10% or less of the total paid-up equity capital and free reserves of the company; and
ii. such buy-back has been authorized by the Board by means of a resolution passed at its meeting;

•The buy-back is twenty-five per cent or less of the aggregate of paid-up capital and free reserves of the company. But in case of Equity Shares, the same shall be taken as 25% of paid up equity capital only. Debt equity ratio should be 2:1.