1) A buyback of shares allows a company to purchase its own shares from shareholders. This provides shareholders a way to sell shares back to the company.
2) Historically, companies could only buyback shares with court approval except for redeeming preferential shares. The 1999 Companies Act amendment introduced provisions allowing simpler buybacks.
3) Reasons for companies to buyback shares include returning surplus cash, increasing share value, supporting temporary weak share prices, maintaining capital structure, and preventing unwanted takeovers. Buybacks are funded from free reserves, securities premium, or share/security proceeds.
Share capital is an essential part of a company. Share capital can be equity or preferential shares and must be subscribed to by one or more persons. After shares are allotted, shareholders only have rights like voting and dividends - they have no claim to the money paid for shares. A way for shareholders to realize the price of shares is to transfer them to another person. The Companies Act allows companies to buy back shares directly from shareholders in a process called buy back of shares. Prior to 1999, companies could only buy back shares with court approval but amendments now allow less complex buybacks. Companies must meet various conditions for buybacks like having authorization, passing a board or shareholder resolution, maintaining solvency, and completing the buy
This document defines shares and share capital, and outlines the key types of each. It discusses equity shares, preference shares, authorized share capital, issued share capital, subscribed share capital, called-up share capital, and paid-up share capital. The document also describes the procedures for issuing shares, including prospectus, application, allotment, calls on shares, and transfers/transmissions of shares.
This document discusses various aspects of issuing shares by a company, including:
1) It defines key share capital terms like authorized capital, issued capital, subscribed capital, called-up capital, and paid-up capital.
2) It describes the types of shares a company can issue and the procedures for issuing shares, including prospectus, application, allotment, calls and accounting entries.
3) It covers concepts like forfeiture of shares, issue of bonus shares, and rights shares.
This document provides an overview of buybacks of shares and securities under various legal frameworks. It begins with definitions of key terms like "buyback" and discusses the history and rationale of buybacks in India. It then compares buyback regulations in the US, UK, and India. The US section outlines the main methods of open market, private, and tender offer repurchases allowed under SEC Rule 10b-18. Benefits of buybacks for companies and shareholders are increasing share price and EPS while returning excess cash. Overall the document provides a comprehensive introduction and comparison of buyback laws and practices.
The document discusses buy-back of shares by a company. It introduces buy-back and outlines the key reasons for companies to buy-back shares such as signaling effect and increasing earnings per share. It also discusses the provisions governing buy-back under the Companies Act, 2013 including conditions, process, restrictions and tax treatment. Finally, it describes various methods of buy-back for both listed and unlisted companies.
This document discusses buybacks of shares by companies. It begins by providing context on internal restructuring and how section 100-105 of the Companies Act governs capital reduction. It then explains that section 77A, 77B, and 77AA now allow companies to buy back their own shares. The rest of the document defines various terms related to share buybacks and discusses the advantages and mechanics of companies conducting share buybacks.
Share capital is an essential part of a company. Share capital can be equity or preferential shares and must be subscribed to by one or more persons. After shares are allotted, shareholders only have rights like voting and dividends - they have no claim to the money paid for shares. A way for shareholders to realize the price of shares is to transfer them to another person. The Companies Act allows companies to buy back shares directly from shareholders in a process called buy back of shares. Prior to 1999, companies could only buy back shares with court approval but amendments now allow less complex buybacks. Companies must meet various conditions for buybacks like having authorization, passing a board or shareholder resolution, maintaining solvency, and completing the buy
This document defines shares and share capital, and outlines the key types of each. It discusses equity shares, preference shares, authorized share capital, issued share capital, subscribed share capital, called-up share capital, and paid-up share capital. The document also describes the procedures for issuing shares, including prospectus, application, allotment, calls on shares, and transfers/transmissions of shares.
This document discusses various aspects of issuing shares by a company, including:
1) It defines key share capital terms like authorized capital, issued capital, subscribed capital, called-up capital, and paid-up capital.
2) It describes the types of shares a company can issue and the procedures for issuing shares, including prospectus, application, allotment, calls and accounting entries.
3) It covers concepts like forfeiture of shares, issue of bonus shares, and rights shares.
This document provides an overview of buybacks of shares and securities under various legal frameworks. It begins with definitions of key terms like "buyback" and discusses the history and rationale of buybacks in India. It then compares buyback regulations in the US, UK, and India. The US section outlines the main methods of open market, private, and tender offer repurchases allowed under SEC Rule 10b-18. Benefits of buybacks for companies and shareholders are increasing share price and EPS while returning excess cash. Overall the document provides a comprehensive introduction and comparison of buyback laws and practices.
The document discusses buy-back of shares by a company. It introduces buy-back and outlines the key reasons for companies to buy-back shares such as signaling effect and increasing earnings per share. It also discusses the provisions governing buy-back under the Companies Act, 2013 including conditions, process, restrictions and tax treatment. Finally, it describes various methods of buy-back for both listed and unlisted companies.
This document discusses buybacks of shares by companies. It begins by providing context on internal restructuring and how section 100-105 of the Companies Act governs capital reduction. It then explains that section 77A, 77B, and 77AA now allow companies to buy back their own shares. The rest of the document defines various terms related to share buybacks and discusses the advantages and mechanics of companies conducting share buybacks.
This document discusses various aspects of share capital for companies. It defines shares and their key characteristics such as being movable property. It describes different types of share capital including authorized, issued, paid up, called up, and reserve capital. It explains how companies can issue shares and allot them to shareholders in return for consideration, typically cash but sometimes other assets. It also discusses rules around issuing shares at a discount or premium.
Giving shares can be a great incentive but be aware that they can be difficult to buy back! For further information and advice, please contact ana.gresapico@ocsolicitors.com, or 0207 067 4300.
1. Amalgamation is the combination of two or more companies into a new entity, where the combining companies cease to exist. Absorption and external reconstruction are other forms of business combination where an existing company takes over another company.
2. The objectives of amalgamation include achieving economies of scale, eliminating competition, building goodwill, risk diversification, and improved management effectiveness.
3. The procedure of amalgamation includes finalizing terms by boards, preparing a scheme of amalgamation, obtaining shareholder and regulatory approvals, forming a new company, transferring assets and liabilities, and liquidating transferor companies.
1. Internal reconstruction involves altering or reducing the claims of shareholders, creditors, and other liabilities of a company experiencing losses or overvaluation of assets, in order to write off accumulated losses and show a true financial position. This can involve reorganizing share capital through actions like increasing or decreasing share capital.
2. Amalgamation is the merging of two or more companies, and can reduce competition and costs while achieving economies of scale. There are two types: amalgamation in the nature of a merger, and amalgamation in the nature of a purchase.
3. External reconstruction involves liquidating an existing financially troubled company and starting a new company to take over its assets and liabilities. It differs from internal reconstruction
provisions and restrictions of buy back of sharessangeeta saini
The document provides information about buybacks of shares by companies. It discusses the methods of buybacks, provisions and restrictions under the Companies Act 2013, and examples. Specifically, it notes that companies can buy back shares from existing shareholders proportionately, from the open market, or by purchasing employee shares. Restrictions include the buyback being authorized by articles and below 25% of paid-up capital and free reserves. An example is provided of Reliance Industries announcing a Rs. 10,440 crore buyback of 12 crore shares at Rs. 870 per share.
- Companies buy back their own shares to increase the value of remaining shares by reducing supply, or to eliminate threats from shareholders seeking control.
- There are legal requirements for buybacks in India including passing a special shareholder resolution, limits on percentage of shares/capital that can be bought back, and filing documents with regulatory authorities.
- The key methods for conducting a buyback include open market purchases, Dutch auctions, and offers made to existing shareholders on a proportional basis. Companies must follow procedures for making offers, accepting tenders, payment for shares, and cancelling repurchased shares.
1. The document discusses the nature and types of share capital for companies. It defines a company and lists its key characteristics such as separate legal entity status, perpetual existence, and limited liability for shareholders.
2. There are three main types of companies - private companies which are restricted in ownership and transfer of shares, public companies which have no such restrictions, and one person companies which can only have one member.
3. Shares are classified into preference shares, which get priority in dividends and capital repayment, and equity shares. Key terms related to share capital such as authorized, issued, called up, and paid up capital are also explained.
A bonus share is a free share given to existing shareholders without requiring additional payment. It increases the number of shares a shareholder owns but does not change the overall value of their stake. Companies issue bonus shares to capitalize profits and reserves, increasing issued share capital without changing assets. The process involves board and shareholder approval, maintaining sufficient reserves, and filing necessary forms. Key conditions include having authorization in the articles of association and no payment defaults.
The new Companies Law 2013 (India) - Chapter 4: Share Capital and DebenturesBold Kiln
The notification provides details of new rules related to share capital and debentures under the Companies Act 2013. Key points include:
- Rules for issuance of equity shares with differential rights subject to certain conditions like authorization in AoA, shareholder approval, limits on percentage of shares issued, track record of company etc.
- Requirements for share certificates including format, details to be mentioned, process for issuance of renewed or duplicate certificates.
- Maintenance of registers, books and documents related to share certificates including blank forms, their custody and preservation.
The notification supersedes previous rules under the Companies Act 1956 and provides the framework for companies to issue and manage share capital and debentures in
Introduction and Accounting for Buy-back of Shares in India as per the Companies Act 2013 and other rules.
It will be useful for the students of B. Com., B.Com.(H), CA, CS and other professional courses, studying Corporate Accounting.
The document discusses stock buybacks, also known as share repurchases, by companies. It provides details on the various methods and regulations around companies purchasing their own outstanding shares to reduce the total number of shares available on the market. Key points include that buybacks can increase share value for remaining shareholders and defend against hostile takeovers, but may also imply the company sees its stock as undervalued or lacks growth opportunities.
This document provides an overview of share capital, including its definition, types, and key regulations. It discusses authorized capital, paid-up capital, called-up capital, and uncalled capital. It also covers the different classes of shares such as preference shares, ordinary shares, deferred shares, and redeemable preference shares. The document outlines regulations around issuing new shares, increasing or reducing share capital, transferring shares, transmitting shares, and buying back shares.
The document discusses various methods of company reconstruction including internal and external reorganization. Internal reorganization involves altering a company's capital structure through actions like changing authorized capital, reducing paid up capital, issuing bonus shares, or redeeming preference shares. External reorganization involves arrangements with outsiders such as disposing of assets/liabilities, debt restructuring schemes, business combinations, or devising a scheme to avoid liquidation. Specific examples and journal entries are provided to illustrate reduction of paid up capital through cancellation of losses or uncalled capital. The overall goal of reconstruction is to help distressed companies adapt, restructure finances, and potentially avoid liquidation.
This document discusses share capital and loan capital (borrowing powers) of companies under Indian company law.
It defines various types of share capital including authorized capital, issued capital, subscribed capital, called-up capital, paid-up capital, and reserve capital. It also discusses alteration and reduction of share capital, duties of the court in reduction of capital, and liability of members after reduction.
It then discusses a company's borrowing powers, including implied powers to borrow for trading companies and express powers required for non-trading companies. It discusses limitations on director's borrowing powers and consequences of ultra vires borrowing by a company or directors. Key points covered are rights of lenders in case of ultra vires borrowing, and
The document discusses various aspects of membership in a company under Indian law. It covers who can be members of a company, how membership is acquired and terminated, rights and liabilities of members, and maintenance of registers related to members. It also discusses share capital structure, types of shares, issue and allotment of shares, and transfer and forfeiture of shares. Finally, it briefly outlines directors, their qualifications and disqualifications, and rules around their remuneration.
The document discusses share buybacks by companies. It defines a share buyback as a company repurchasing its own outstanding shares to reduce the number on the market. This can increase the value of remaining shares or eliminate threats from shareholders seeking control. The document outlines the objectives, conditions, sources of funding, procedures, and penalties for buybacks under Indian law. It notes buybacks can enable faster achievement of capital structure goals but may also signal mismanagement if overpaid for or cash is excessively eroded.
Reconstruction involves the transfer of a company's whole undertaking and property to a new company, with the shareholders of the old company receiving shares in the new company. Amalgamation occurs when two or more companies combine into one company, with the shareholders of the amalgamating companies becoming shareholders of the amalgamated company. Approval by shareholders and court sanction are required for reconstruction and amalgamation schemes. The court sanctions the transfer of property and liabilities and ensures dissenting shareholders' rights are protected.
The document outlines the steps a company must take to issue bonus shares. It begins by verifying the company's eligibility to issue bonus shares under applicable law and its articles of association. It then checks that the authorized share capital has adequate unissued shares. Next, it determines the terms of the bonus issue such as ratio and sources of capitalization. The document specifies convening a board meeting to approve the bonus issue and pass a resolution. It provides templates for board meeting notices and resolutions. Finally, it details giving notice of an extraordinary general meeting if shareholder approval is required to capitalize profits for the bonus issue.
The document discusses buyback of shares by a company. It defines buyback as a company repurchasing its own shares. The objectives of buyback include increasing promoter holdings, improving earnings per share, and paying surplus cash. Companies can buyback shares through tender offers to shareholders, purchasing on the open market, or through book building. Strict conditions apply, including board and shareholder approvals, maintaining debt-equity ratios, and extinguishing repurchased shares within 7 days. Regulations cover pricing, timelines, disclosure requirements, and prohibitions.
Overview of Regulation “the Unlisted Companies (Buy-Back of Shares) Regulations, 2022 under Companies Act, 2017 ; Securities and Exchange Commission of Pakistan (SECP)
1) A buyback of shares refers to a company repurchasing its own outstanding shares from investors in order to reduce the number of shares available on the market.
2) Companies buy back shares to increase the value of remaining shares by reducing supply, or to prevent hostile takeovers by shareholders seeking control.
3) Legal regulations in India require companies to follow procedures such as board resolutions, public announcements, and time periods when conducting a share buyback.
This document discusses various aspects of share capital for companies. It defines shares and their key characteristics such as being movable property. It describes different types of share capital including authorized, issued, paid up, called up, and reserve capital. It explains how companies can issue shares and allot them to shareholders in return for consideration, typically cash but sometimes other assets. It also discusses rules around issuing shares at a discount or premium.
Giving shares can be a great incentive but be aware that they can be difficult to buy back! For further information and advice, please contact ana.gresapico@ocsolicitors.com, or 0207 067 4300.
1. Amalgamation is the combination of two or more companies into a new entity, where the combining companies cease to exist. Absorption and external reconstruction are other forms of business combination where an existing company takes over another company.
2. The objectives of amalgamation include achieving economies of scale, eliminating competition, building goodwill, risk diversification, and improved management effectiveness.
3. The procedure of amalgamation includes finalizing terms by boards, preparing a scheme of amalgamation, obtaining shareholder and regulatory approvals, forming a new company, transferring assets and liabilities, and liquidating transferor companies.
1. Internal reconstruction involves altering or reducing the claims of shareholders, creditors, and other liabilities of a company experiencing losses or overvaluation of assets, in order to write off accumulated losses and show a true financial position. This can involve reorganizing share capital through actions like increasing or decreasing share capital.
2. Amalgamation is the merging of two or more companies, and can reduce competition and costs while achieving economies of scale. There are two types: amalgamation in the nature of a merger, and amalgamation in the nature of a purchase.
3. External reconstruction involves liquidating an existing financially troubled company and starting a new company to take over its assets and liabilities. It differs from internal reconstruction
provisions and restrictions of buy back of sharessangeeta saini
The document provides information about buybacks of shares by companies. It discusses the methods of buybacks, provisions and restrictions under the Companies Act 2013, and examples. Specifically, it notes that companies can buy back shares from existing shareholders proportionately, from the open market, or by purchasing employee shares. Restrictions include the buyback being authorized by articles and below 25% of paid-up capital and free reserves. An example is provided of Reliance Industries announcing a Rs. 10,440 crore buyback of 12 crore shares at Rs. 870 per share.
- Companies buy back their own shares to increase the value of remaining shares by reducing supply, or to eliminate threats from shareholders seeking control.
- There are legal requirements for buybacks in India including passing a special shareholder resolution, limits on percentage of shares/capital that can be bought back, and filing documents with regulatory authorities.
- The key methods for conducting a buyback include open market purchases, Dutch auctions, and offers made to existing shareholders on a proportional basis. Companies must follow procedures for making offers, accepting tenders, payment for shares, and cancelling repurchased shares.
1. The document discusses the nature and types of share capital for companies. It defines a company and lists its key characteristics such as separate legal entity status, perpetual existence, and limited liability for shareholders.
2. There are three main types of companies - private companies which are restricted in ownership and transfer of shares, public companies which have no such restrictions, and one person companies which can only have one member.
3. Shares are classified into preference shares, which get priority in dividends and capital repayment, and equity shares. Key terms related to share capital such as authorized, issued, called up, and paid up capital are also explained.
A bonus share is a free share given to existing shareholders without requiring additional payment. It increases the number of shares a shareholder owns but does not change the overall value of their stake. Companies issue bonus shares to capitalize profits and reserves, increasing issued share capital without changing assets. The process involves board and shareholder approval, maintaining sufficient reserves, and filing necessary forms. Key conditions include having authorization in the articles of association and no payment defaults.
The new Companies Law 2013 (India) - Chapter 4: Share Capital and DebenturesBold Kiln
The notification provides details of new rules related to share capital and debentures under the Companies Act 2013. Key points include:
- Rules for issuance of equity shares with differential rights subject to certain conditions like authorization in AoA, shareholder approval, limits on percentage of shares issued, track record of company etc.
- Requirements for share certificates including format, details to be mentioned, process for issuance of renewed or duplicate certificates.
- Maintenance of registers, books and documents related to share certificates including blank forms, their custody and preservation.
The notification supersedes previous rules under the Companies Act 1956 and provides the framework for companies to issue and manage share capital and debentures in
Introduction and Accounting for Buy-back of Shares in India as per the Companies Act 2013 and other rules.
It will be useful for the students of B. Com., B.Com.(H), CA, CS and other professional courses, studying Corporate Accounting.
The document discusses stock buybacks, also known as share repurchases, by companies. It provides details on the various methods and regulations around companies purchasing their own outstanding shares to reduce the total number of shares available on the market. Key points include that buybacks can increase share value for remaining shareholders and defend against hostile takeovers, but may also imply the company sees its stock as undervalued or lacks growth opportunities.
This document provides an overview of share capital, including its definition, types, and key regulations. It discusses authorized capital, paid-up capital, called-up capital, and uncalled capital. It also covers the different classes of shares such as preference shares, ordinary shares, deferred shares, and redeemable preference shares. The document outlines regulations around issuing new shares, increasing or reducing share capital, transferring shares, transmitting shares, and buying back shares.
The document discusses various methods of company reconstruction including internal and external reorganization. Internal reorganization involves altering a company's capital structure through actions like changing authorized capital, reducing paid up capital, issuing bonus shares, or redeeming preference shares. External reorganization involves arrangements with outsiders such as disposing of assets/liabilities, debt restructuring schemes, business combinations, or devising a scheme to avoid liquidation. Specific examples and journal entries are provided to illustrate reduction of paid up capital through cancellation of losses or uncalled capital. The overall goal of reconstruction is to help distressed companies adapt, restructure finances, and potentially avoid liquidation.
This document discusses share capital and loan capital (borrowing powers) of companies under Indian company law.
It defines various types of share capital including authorized capital, issued capital, subscribed capital, called-up capital, paid-up capital, and reserve capital. It also discusses alteration and reduction of share capital, duties of the court in reduction of capital, and liability of members after reduction.
It then discusses a company's borrowing powers, including implied powers to borrow for trading companies and express powers required for non-trading companies. It discusses limitations on director's borrowing powers and consequences of ultra vires borrowing by a company or directors. Key points covered are rights of lenders in case of ultra vires borrowing, and
The document discusses various aspects of membership in a company under Indian law. It covers who can be members of a company, how membership is acquired and terminated, rights and liabilities of members, and maintenance of registers related to members. It also discusses share capital structure, types of shares, issue and allotment of shares, and transfer and forfeiture of shares. Finally, it briefly outlines directors, their qualifications and disqualifications, and rules around their remuneration.
The document discusses share buybacks by companies. It defines a share buyback as a company repurchasing its own outstanding shares to reduce the number on the market. This can increase the value of remaining shares or eliminate threats from shareholders seeking control. The document outlines the objectives, conditions, sources of funding, procedures, and penalties for buybacks under Indian law. It notes buybacks can enable faster achievement of capital structure goals but may also signal mismanagement if overpaid for or cash is excessively eroded.
Reconstruction involves the transfer of a company's whole undertaking and property to a new company, with the shareholders of the old company receiving shares in the new company. Amalgamation occurs when two or more companies combine into one company, with the shareholders of the amalgamating companies becoming shareholders of the amalgamated company. Approval by shareholders and court sanction are required for reconstruction and amalgamation schemes. The court sanctions the transfer of property and liabilities and ensures dissenting shareholders' rights are protected.
The document outlines the steps a company must take to issue bonus shares. It begins by verifying the company's eligibility to issue bonus shares under applicable law and its articles of association. It then checks that the authorized share capital has adequate unissued shares. Next, it determines the terms of the bonus issue such as ratio and sources of capitalization. The document specifies convening a board meeting to approve the bonus issue and pass a resolution. It provides templates for board meeting notices and resolutions. Finally, it details giving notice of an extraordinary general meeting if shareholder approval is required to capitalize profits for the bonus issue.
The document discusses buyback of shares by a company. It defines buyback as a company repurchasing its own shares. The objectives of buyback include increasing promoter holdings, improving earnings per share, and paying surplus cash. Companies can buyback shares through tender offers to shareholders, purchasing on the open market, or through book building. Strict conditions apply, including board and shareholder approvals, maintaining debt-equity ratios, and extinguishing repurchased shares within 7 days. Regulations cover pricing, timelines, disclosure requirements, and prohibitions.
Overview of Regulation “the Unlisted Companies (Buy-Back of Shares) Regulations, 2022 under Companies Act, 2017 ; Securities and Exchange Commission of Pakistan (SECP)
1) A buyback of shares refers to a company repurchasing its own outstanding shares from investors in order to reduce the number of shares available on the market.
2) Companies buy back shares to increase the value of remaining shares by reducing supply, or to prevent hostile takeovers by shareholders seeking control.
3) Legal regulations in India require companies to follow procedures such as board resolutions, public announcements, and time periods when conducting a share buyback.
The document discusses buybacks of shares by two companies, Binani Cement Ltd and Hindustan Unilever Ltd. Binani Cement Ltd is issuing a public announcement for a buyback of shares in compliance with SEBI regulations, with a closure date of August 10, 2010. Hindustan Unilever's board approved a share buyback of up to Rs. 280 per share not exceeding Rs. 630 crore, as announced last week. The company had cash and bank balances of Rs. 2102.38 crore as of March 31.
A buyback, also known as a share repurchase, occurs when a company buys back its own outstanding shares from investors to reduce the number of shares available on the open market. Companies may do this to increase share value for remaining investors by reducing supply, or to prevent other shareholders from gaining control. The document outlines the legal provisions and process for companies in India to conduct a buyback according to the Companies Act and SEBI regulations, including establishing a capital redemption reserve and restrictions on further share issues. It provides examples of companies that have announced buybacks during the COVID-19 pandemic.
Giving shares can be a great incentive but be aware that they can be difficult to buy back! For further information and advice, please contact ana.gresapico@ocsolicitors.com, or 0207 067 4300.
Giving shares can be a great incentive but be aware that they can be difficult to buy back! For further information and advice, please contact gabi.olson-welsh@ocsolicitors.com, or 0207 067 4300.
Giving shares can be a great incentive but be aware that they can be difficult to buy back! For further information and advice, please contact ben.robson@ocsolicitors.com, or 0207 067 4300.
(1) The document discusses various types of shares such as equity shares, preference shares, and their characteristics. It explains concepts like share capital, types of share capital, rights of shareholders, and types of preference shares.
(2) It also covers topics like allotment of shares, declaration of dividends, transfer of shares, transmission of shares, and increase of share capital. Methods to increase capital include further issue of shares, rights issues, and conversion of loans or debentures into equity.
(3) SEBI guidelines related to rights issues are also summarized, setting limits on fund raising and requiring measures like underwriting and minimum subscription.
IGATE Corporation accepted the delisting offer for its subsidiary Patni Computer Systems from Indian stock exchanges at a price of Rs. 520 per share, determined through a reverse book building process. The total cost for IGATE to delist Patni was Rs. 1,394 crores. The delisting process opening date was March 28, 2012 with a floor price of Rs. 356.74 per share. IGATE owned around 83% of Patni and the successful delisting would allow for a streamlined corporate structure and reduced compliance costs.
This document discusses various topics related to shares and share capital under Indian company law. It defines key terms like share, stock, types of shares (preference shares, equity shares, sweat equity shares, etc.), kinds of share capital, reduction of share capital, issue of shares (at premium, discount, sweat equity), buyback of shares, and restrictions on companies purchasing their own shares. It provides details on procedures that must be followed for various share-related activities as per the Companies Act and Companies Rules.
Reconstruction is a process where a company reorganizes its legal, operational, ownership and other structures. It involves transferring a company's business to a new company, with the old company being liquidated. Shareholders of the old company receive equivalent shares in the new company. Reconstruction is required when a company has losses for many years and its financial statements do not accurately reflect its position. There are two types of reconstruction - external, where a new company purchases the business of the old company, and internal, which involves reorganizing the company's capital structure through steps like reducing share capital to write off losses. Internal reconstruction methods include altering share capital, varying shareholder rights, and reducing share capital through a special resolution.
These lecture notes clearly explain the concept of shares in regards to Company Law. Excellent for revision and study for CPAs, Bcom or any students taking business related courses where business law is a course unit.
Share capital refers to the total monetary value of shares issued by a company. It includes the authorized share capital, which is the maximum amount allowed, as well as the issued, subscribed, called up, paid up, and uncalled share capital, which refer to portions of the authorized capital that have been offered, applied for, demanded as payment, paid, and not yet demanded as payment by the company. Shares represent ownership units in a company and provide rights to profits, while stock refers to consolidated fully paid up shares. Companies can issue different types of shares such as equity shares, preference shares, cumulative/non-cumulative preference shares, and more. Allotment of shares must follow certain legal procedures and restrictions.
Format of AOA (Article of Association) as per New Companies Act 2013mystartupvakil.com
Dear All
As you all know 98 sections of the Companies Act 2013 has been implemented w.e.f. 12th Sep 2013, therefore all ROC are asking changes in AOA. I am sharing a draft form of AOA. Kindly note that there is no change in MOA you can still use the old MOA.
Equity shares represent ownership in a company, providing voting rights and a claim to residual assets. Preference shares have a preferential claim to dividends and repayment of capital. A company can raise its share capital through further issue of shares, which must first be offered to existing shareholders through a rights issue respecting their pre-emptive rights. Capital can also be increased by converting outstanding loans or debentures into shares. SEBI guidelines regulate rights issues for amounts over Rs. 50 lakhs, requiring appointment of a merchant banker, minimum subscription, and other procedures.
The document discusses financial restructuring of companies. It explains that financial restructuring involves rearrangement of a company's financial structure to make its finances more balanced by being neither overcapitalized nor undercapitalized. This can be done through methods like reducing share capital, reorganizing capital, buying back shares, and further issuing shares. The document outlines the provisions under Indian law regarding alteration of share capital, buyback of shares, and reduction of capital. It also discusses the need for and various modes of financial restructuring like reducing or increasing capital, and the process that companies must follow for actions like reducing share capital, buyback of shares, and ensuring creditors' rights are protected.
SEBI streamlines the process of Buy-back of securities.pdfRBSA Advisors
With the intent to simplify the Buy-back process of securities, level the playing field for investors, and encourage ease of doing business, the Securities & Exchange Board of India (“SEBI”) has relaxed certain norms in the SEBI (Buy-back of Securities) Regulations, 2018 pursuant to SEBI (Buy-back of Securities) (Amendment) Regulations, 2023. Further, Operational Guidance on Buy-back was issued by SEBI on 8th March 2023. The amended regulation has come into force w.e.f 9th March, 2023.
Falcon stands out as a top-tier P2P Invoice Discounting platform in India, bridging esteemed blue-chip companies and eager investors. Our goal is to transform the investment landscape in India by establishing a comprehensive destination for borrowers and investors with diverse profiles and needs, all while minimizing risk. What sets Falcon apart is the elimination of intermediaries such as commercial banks and depository institutions, allowing investors to enjoy higher yields.
Confirmation of Payee (CoP) is a vital security measure adopted by financial institutions and payment service providers. Its core purpose is to confirm that the recipient’s name matches the information provided by the sender during a banking transaction, ensuring that funds are transferred to the correct payment account.
Confirmation of Payee was built to tackle the increasing numbers of APP Fraud and in the landscape of UK banking, the spectre of APP fraud looms large. In 2022, over £1.2 billion was stolen by fraudsters through authorised and unauthorised fraud, equivalent to more than £2,300 every minute. This statistic emphasises the urgent need for robust security measures like CoP. While over £1.2 billion was stolen through fraud in 2022, there was an eight per cent reduction compared to 2021 which highlights the positive outcomes obtained from the implementation of Confirmation of Payee. The number of fraud cases across the UK also decreased by four per cent to nearly three million cases during the same period; latest statistics from UK Finance.
In essence, Confirmation of Payee plays a pivotal role in digital banking, guaranteeing the flawless execution of banking transactions. It stands as a guardian against fraud and misallocation, demonstrating the commitment of financial institutions to safeguard their clients’ assets. The next time you engage in a banking transaction, remember the invaluable role of CoP in ensuring the security of your financial interests.
For more details, you can visit https://technoxander.com.
KYC Compliance: A Cornerstone of Global Crypto Regulatory FrameworksAny kyc Account
This presentation explores the pivotal role of KYC compliance in shaping and enforcing global regulations within the dynamic landscape of cryptocurrencies. Dive into the intricate connection between KYC practices and the evolving legal frameworks governing the crypto industry.
Discover the Future of Dogecoin with Our Comprehensive Guidance36 Crypto
Learn in-depth about Dogecoin's trajectory and stay informed with 36crypto's essential and up-to-date information about the crypto space.
Our presentation delves into Dogecoin's potential future, exploring whether it's destined to skyrocket to the moon or face a downward spiral. In addition, it highlights invaluable insights. Don't miss out on this opportunity to enhance your crypto understanding!
https://36crypto.com/the-future-of-dogecoin-how-high-can-this-cryptocurrency-reach/
Vicinity Jobs’ data includes more than three million 2023 OJPs and thousands of skills. Most skills appear in less than 0.02% of job postings, so most postings rely on a small subset of commonly used terms, like teamwork.
Laura Adkins-Hackett, Economist, LMIC, and Sukriti Trehan, Data Scientist, LMIC, presented their research exploring trends in the skills listed in OJPs to develop a deeper understanding of in-demand skills. This research project uses pointwise mutual information and other methods to extract more information about common skills from the relationships between skills, occupations and regions.
"Does Foreign Direct Investment Negatively Affect Preservation of Culture in the Global South? Case Studies in Thailand and Cambodia."
Do elements of globalization, such as Foreign Direct Investment (FDI), negatively affect the ability of countries in the Global South to preserve their culture? This research aims to answer this question by employing a cross-sectional comparative case study analysis utilizing methods of difference. Thailand and Cambodia are compared as they are in the same region and have a similar culture. The metric of difference between Thailand and Cambodia is their ability to preserve their culture. This ability is operationalized by their respective attitudes towards FDI; Thailand imposes stringent regulations and limitations on FDI while Cambodia does not hesitate to accept most FDI and imposes fewer limitations. The evidence from this study suggests that FDI from globally influential countries with high gross domestic products (GDPs) (e.g. China, U.S.) challenges the ability of countries with lower GDPs (e.g. Cambodia) to protect their culture. Furthermore, the ability, or lack thereof, of the receiving countries to protect their culture is amplified by the existence and implementation of restrictive FDI policies imposed by their governments.
My study abroad in Bali, Indonesia, inspired this research topic as I noticed how globalization is changing the culture of its people. I learned their language and way of life which helped me understand the beauty and importance of cultural preservation. I believe we could all benefit from learning new perspectives as they could help us ideate solutions to contemporary issues and empathize with others.
How to Invest in Cryptocurrency for Beginners: A Complete GuideDaniel
Cryptocurrency is digital money that operates independently of a central authority, utilizing cryptography for security. Unlike traditional currencies issued by governments (fiat currencies), cryptocurrencies are decentralized and typically operate on a technology called blockchain. Each cryptocurrency transaction is recorded on a public ledger, ensuring transparency and security.
Cryptocurrencies can be used for various purposes, including online purchases, investment opportunities, and as a means of transferring value globally without the need for intermediaries like banks.
Independent Study - College of Wooster Research (2023-2024) FDI, Culture, Glo...AntoniaOwensDetwiler
"Does Foreign Direct Investment Negatively Affect Preservation of Culture in the Global South? Case Studies in Thailand and Cambodia."
Do elements of globalization, such as Foreign Direct Investment (FDI), negatively affect the ability of countries in the Global South to preserve their culture? This research aims to answer this question by employing a cross-sectional comparative case study analysis utilizing methods of difference. Thailand and Cambodia are compared as they are in the same region and have a similar culture. The metric of difference between Thailand and Cambodia is their ability to preserve their culture. This ability is operationalized by their respective attitudes towards FDI; Thailand imposes stringent regulations and limitations on FDI while Cambodia does not hesitate to accept most FDI and imposes fewer limitations. The evidence from this study suggests that FDI from globally influential countries with high gross domestic products (GDPs) (e.g. China, U.S.) challenges the ability of countries with lower GDPs (e.g. Cambodia) to protect their culture. Furthermore, the ability, or lack thereof, of the receiving countries to protect their culture is amplified by the existence and implementation of restrictive FDI policies imposed by their governments.
My study abroad in Bali, Indonesia, inspired this research topic as I noticed how globalization is changing the culture of its people. I learned their language and way of life which helped me understand the beauty and importance of cultural preservation. I believe we could all benefit from learning new perspectives as they could help us ideate solutions to contemporary issues and empathize with others.
OJP data from firms like Vicinity Jobs have emerged as a complement to traditional sources of labour demand data, such as the Job Vacancy and Wages Survey (JVWS). Ibrahim Abuallail, PhD Candidate, University of Ottawa, presented research relating to bias in OJPs and a proposed approach to effectively adjust OJP data to complement existing official data (such as from the JVWS) and improve the measurement of labour demand.
Power point analisis laporan keuangan chapter 7 subramanyam
Buy back of securities
1. BUY BACKOF SECURITIES – AN OVERVIEW
INTRODUCTION
Share capital is a very essential part of a company, listed or unlisted. Share capital can be of
two types i.e. equity share capital or preferential share capital. The share capital of a
company has to be subscribed by one or more persons. After the share of a company has
been allotted to the subscribing members, the subscribers have no right over the money
gone as proceeds of the shares subscribed. All that the shareholder has is the right to vote
at the general meetings of the company or the right to receive dividends or right to such
other benefits which may have been prescribed. The only option left with the shareholder in
order to realise the price of the share is to transfer the share to some other person.
But there are certain provisions in the companies act which allow the shareholders to sell
their shares directly to the company and such provisions are termed as buy back of shares.
Buy back of shares can be understood as the process by which a company buys its share
back from its shareholder or a resort a shareholder can take in order to sell the share back
to the company.
HISTORY
Prior to the amendment of the 1999 of the companies act there was no way a company
could buy its shares back from the shareholders without a prior sanction of the court
(except for the preferential shares). The laws as to the buying of its share by the companies
were very stringent. Some of the ways by which a company could buy its shares back were
as follows:-
(i) Reduction of share capital as given in sections 100 to 104.
(ii) Redemption of redeemable preferential shares under section 80.
(iii) Purchase of shares under an order of the court for scheme of arrangement
under section 391 in compliance with the provisions of sections 100 to 104.
(iv) Purchase of shares of minority shareholders under the order of the company law
board under section 402(b).
2. Though there were ways by which a company could buy its shares back from the
shareholders but it could not be done without the sanction of the court. This was done to
protect the rights of the creditors as well as the shareholders. But the need of less complex
ways of buying its shares back by the company was always felt. The much needed change in
the companies act was brought about by the companies amendment act 1999.Sections 77A,
77AA and 77B were inserted in the companies act by this amendment.
REASONS FOR BUY BACK
In the words of the working group which recommended the introduction of buy back in the
companies act:
“It is an erroneous belief that the sole reason for buy back is to block hostile take-overs. In
this connection it is pertinent to list five reasons why the bank of England favoured the
making of law to allow companies to repurchase their shares of which blocking take-over
was only one:
(i) To return surplus cash to shareholders
(ii) To increase the underlying share value
(iii) To support the share prices during temporary weakness.
(iv) To achieve or maintain a target capital structure.
(v) To prevent or inhibit unwelcome take-over bids.
Briefly a company resorting to the buy back may have surplus cash, and it may not have
found the right avenue to invest such surplus cash, during such period of dilemma the
company may decide to return the surplus cash by buying back its shares, with a hope that
at a later time when the company brings on an expansion the investors do not loose their
faith in the company. Secondly the company might as well think of buying its shares with a
view to increase the value of the shares which after the process of buy back still remain in
the market. For after the shares are bought back the number of marketable shares become
less and thus the prices increase. Thirdly, at times there is a slump in the share market due
to no fault of the company. Though the slouch may be temporary but may have continued
far too long .The management then may decide to give value to the shareholders and buy
back there shares at a price higher than the market price. This is generally done to instill
faith in the minds of the shareholders. Saving a company from hostile take-over has always
been seen as a major force behind bringing about this amendment, the company may use
the surplus cash available in buying back its shares and bringing the number of floating
shares down, resulting in the suitor not finding it a worthy investment or a profitable
3. acquisition. These could be certain reasons why a company may resort to buy back of its
shares.
RESOURCES OF BUY BACK:
The companies amendment act 1999 under section 77A prescribes for the sources of buying
back of shares or other specified securities by a company, which are as follows-:
i) Free reserves- a company may buy back out of its free reserves but a sum equal
to the nominal value of the shares so purchased must be deposited in the capital
redemption reserves account.
ii) Securities premium account.
iii) The proceeds of any shares or specified securities.
No buy back of any shares or securities shall be made out of the proceeds of an earlier issue
of the same kind of shares of same kind of securities
CONDITIONS FOR A BUY BACK :
Sub clause (2) of section 77A enshrines the conditions for a buy back, which are as follows :
a) It should be authorised by the articles of association of the company.
b) A special resolution has been passed at the general meeting of the company
authorising the buy back.
If the buy back is or less than 10 percent of the total paid up equity share capital, a
resolution at the general meeting is not needed to be passed rather a simple board
resolution is enough.
Provided that no offer of buy back shall be made within three sixty five days reckoned from
the date of proceeding offer of buy back.
c) The buy back is or less than 25 percent of the total paid up equity share capital
and free reserves
d) The ratio of debt owned by the company is not more than twice the capital and
its free reserves after such buy back.
e) All the shares or other specified securities for buy back are fully paid up.
4. f) The buy back of shares or other specified securities listed on any recognised
stock exchange is in accordance with the regulations made by the securities and exchange
board of India in this behalf:
g) The buy back in respect of shares and other specified securities other than those
specified in the aforesaid clause is in accordance with the guidelines specified.
DISCLOSURE IN THE EXPLANATORY STATEMENT :
Notice of the meeting at which a resolution for buy back is proposed to be passed has to be
accompanied by an explanatory statement stating –
a) a full and complete disclosure of all material facts
b) the necessity for buy back
c) class of securities intended to be bought back under the buy back
d) the amount to be invested under buy back.
MODES OF BUY BACK :
Buy back of shares or other specified securities can be done through various sources which
have been illustrated under sub section 5 of section 77A, they are as follows:-
a) From the existing security holders on a proportionate basis or
b) From the open market, through ;
i) stock market
ii) book building process
c) From odd lots, that is to say where the lot of securities of a public company, whose
shares are listed on a recognised stock exchange, is smaller than such marketable
lot, as may be specified by the stock exchange; or
c) by purchasing the securities issued to employees of the company under a scheme
of stock option or sweat equity.
DECLARATION OF SOLVENCY:
Where a company has passed a special resolution under clause b of sub-section (2) or a
board resolution has been passed under some circumstances to buy back its own shares or
other specified securities, under the section, it shall before making such buy back ,file with
the registrar and the securities and exchange board of India a declaration of solvency in the
5. form as may be prescribed and verified by an affidavit to the effect that the board has made
a full enquiry into the affairs of the company as a result of which they have formed an
opinion that it is capable of meeting its liabilities and will not be rendered insolvent within a
period one year of the date of declaration adopted by the board, and signed by at least two
directors of the company, one of whom shall be the managing director, if any
REGISTER OF SECURITIES BOUGHT BACK :
Section 77A(9) prescribes for the manner in which a register shall be maintained a register
of shares so bought back and enter therein the following particulars:-
i) the consideration paid for the securities bought back.
ii) the date of cancellation of securities
iii) the date of extinguishing and physically destroying of securities.
iv) other particulars as may be prescribed.
The shares or the securities so bought back shall be physically destroyed within seven days
from the last date f completion of such buy back.
PROHIBITION ON FURTHER ISSUE OF SHARES AFTER BUY BACK :
Every buy back shall be completed within twelve months from the date of passing the
special resolution or the board resolution as the case may be. After the buy back is
completed the company is not allowed to issue the bought back shares for the period of six
months by any means including further issue of shares under section 81(1)(a) of the
companies act 1956. It may however issue bonus shares or discharge its subsisting
obligation of converting preference shares or other specified securities into equity shares.
PROCEDURE FOR BUY BACK
a. Where a company proposes to buy back its shares, it shall, after passing of the
special/Board resolution make a public announcement at least one English National Daily,
one Hindi National daily and Regional Language Daily at the place where the registered
office of the company is situated.
b. The public announcement shall specify a date, which shall be "specified date" for the
purpose of determining the names of shareholders to whom the letter of offer has to be
sent.
c. A public notice shall be given containing disclosures as specified in Schedule I of the
SEBI regulations.
d. A draft letter of offer shall be filed with SEBI through a merchant Banker. The letter
of offer shall then be dispatched to the members of the company.
6. e. A copy of the Board resolution authorising the buy back shall be filed with the SEBI
and stock exchanges.
f. The date of opening of the offer shall not be earlier than seven days or later than 30
days after the specified date.
g. The buy back offer shall remain open for a period of not less than 15 days and not
more than 30 days.
h. A company opting for buy back through the public offer or tender offer shall open an
escrow Account.
PROHIBITION OF BUY BACK IN CERTAIN CIRCUMSTANCES :
Section 77B holds the restrictions on the companies to buy back its shares. No company
shall buy its own shares or other specified securities –
a) through any subsidiary company including its own subsidiary company.
b) Through any investment companies or group of investment companies.
PENALTY :
If a company makes default in complying with the provisions the company or any officer of
the company who is in default shall be punishable with imprisonment for a term which may
extend to two years, or with fine which may extend to fifty thousand rupees, or with both.
The offences are, of course compoundable under Section 621A of the Companies Act, 1956.