{"id":2850,"date":"2021-03-02T05:43:53","date_gmt":"2021-03-02T05:43:53","guid":{"rendered":"https:\/\/swaritadvisors.com\/blog\/?p=2850"},"modified":"2021-03-02T05:43:56","modified_gmt":"2021-03-02T05:43:56","slug":"process-for-buyback-of-shares","status":"publish","type":"post","link":"https:\/\/swaritadvisors.com\/blog\/process-for-buyback-of-shares\/","title":{"rendered":"Process for Buyback of Shares in India: A Guide"},"content":{"rendered":"\n<p class=\"has-drop-cap\">Whenever a\ncompany, whether a Private Limited Company or <strong><a href=\"https:\/\/swaritadvisors.com\/public-limited-company-registration\" class=\"text-primary\">Public\nLimited Company<\/a><\/strong>, decides to restructure its capital to increase its EPS\n(Earning per Share) and to have good shareholder returns, it tends to undergo\nthe process for Buyback of Shares in India. Further, the best time for the\nprocess of Buyback of Shares is when the market value of the shares issued is\nundervalued. As after absorbing the repurchased shares, the total number of the\nshares available in the market gets reduced.<\/p>\n\n\n\n<p>In this learning\nblog, we will cover the concept, requirements, and process for buyback of\nshares in India.<\/p>\n\n\n\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_65 counter-hierarchy ez-toc-counter ez-toc-light-blue ez-toc-container-direction\">\n<p class=\"ez-toc-title\">Table of Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-6a3ad4406a41e\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-6a3ad4406a41e\"  aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/swaritadvisors.com\/blog\/process-for-buyback-of-shares\/#Concept_of_Buyback_of_Shares\" title=\"Concept of Buyback of Shares\">Concept of Buyback of Shares<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/swaritadvisors.com\/blog\/process-for-buyback-of-shares\/#Reasons_to_Choose_the_Process_for_Buyback_of_Shares_in_India\" title=\"Reasons to Choose the Process for Buyback of Shares in India\">Reasons to Choose the Process for Buyback of Shares in India<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/swaritadvisors.com\/blog\/process-for-buyback-of-shares\/#Laws_Governing_the_Process_for_Buyback_of_Shares_in_India\" title=\"Laws Governing the Process for Buyback of Shares in India\">Laws Governing the Process for Buyback of Shares in India<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/swaritadvisors.com\/blog\/process-for-buyback-of-shares\/#Modes_for_Buyback_of_Shares_in_India\" title=\"Modes for Buyback of Shares in India\">Modes for Buyback of Shares in India<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/swaritadvisors.com\/blog\/process-for-buyback-of-shares\/#Sources_for_the_Process_of_Buyback_of_Shares_in_India\" title=\"Sources for the Process of Buyback of Shares in India\">Sources for the Process of Buyback of Shares in India<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/swaritadvisors.com\/blog\/process-for-buyback-of-shares\/#Conditions_for_the_Process_for_Buyback_of_Shares_in_India\" title=\"Conditions for the Process for Buyback of Shares in India\">Conditions for the Process for Buyback of Shares in India<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/swaritadvisors.com\/blog\/process-for-buyback-of-shares\/#Steps_involved_in_the_Process_for_Buyback_of_Shares_in_India\" title=\"Steps involved in the Process for Buyback of Shares in India\">Steps involved in the Process for Buyback of Shares in India<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-8\" href=\"https:\/\/swaritadvisors.com\/blog\/process-for-buyback-of-shares\/#Through_Ordinary_Resolution\" title=\"Through Ordinary Resolution\">Through Ordinary Resolution<\/a><ul class='ez-toc-list-level-4' ><li class='ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-9\" href=\"https:\/\/swaritadvisors.com\/blog\/process-for-buyback-of-shares\/#Sent_the_Notice\" title=\"Sent the Notice\">Sent the Notice<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-10\" href=\"https:\/\/swaritadvisors.com\/blog\/process-for-buyback-of-shares\/#Pass_the_Board_Resolution\" title=\"Pass the Board Resolution\">Pass the Board Resolution<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-11\" href=\"https:\/\/swaritadvisors.com\/blog\/process-for-buyback-of-shares\/#Through_Special_Resolution\" title=\"Through Special Resolution\n\">Through Special Resolution\n<\/a><ul class='ez-toc-list-level-4' ><li class='ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-12\" href=\"https:\/\/swaritadvisors.com\/blog\/process-for-buyback-of-shares\/#Send_Notice_for_Board_Meeting\" title=\"Send Notice for Board Meeting\">Send Notice for Board Meeting<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-13\" href=\"https:\/\/swaritadvisors.com\/blog\/process-for-buyback-of-shares\/#Convene_Board_Meeting\" title=\"Convene Board Meeting\">Convene Board Meeting<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-14\" href=\"https:\/\/swaritadvisors.com\/blog\/process-for-buyback-of-shares\/#Send_Notice_for_Extraordinary_General_Meeting\" title=\"Send Notice for Extraordinary General Meeting\">Send Notice for Extraordinary General Meeting<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-15\" href=\"https:\/\/swaritadvisors.com\/blog\/process-for-buyback-of-shares\/#Convene_EGM\" title=\"Convene EGM\">Convene EGM<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-16\" href=\"https:\/\/swaritadvisors.com\/blog\/process-for-buyback-of-shares\/#Submit_Form_SH_8_and_MGT_14\" title=\"Submit Form SH 8 and MGT 14\">Submit Form SH 8 and MGT 14<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-17\" href=\"https:\/\/swaritadvisors.com\/blog\/process-for-buyback-of-shares\/#Offer_Letter\" title=\"Offer Letter\">Offer Letter<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-18\" href=\"https:\/\/swaritadvisors.com\/blog\/process-for-buyback-of-shares\/#Offer_Acceptance_by_Shareholders\" title=\"Offer Acceptance by Shareholders\">Offer Acceptance by Shareholders<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-19\" href=\"https:\/\/swaritadvisors.com\/blog\/process-for-buyback-of-shares\/#Opening_of_bank_Account\" title=\"Opening of bank Account\">Opening of bank Account<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-20\" href=\"https:\/\/swaritadvisors.com\/blog\/process-for-buyback-of-shares\/#Verification_and_Acceptance_or_Rejection\" title=\"Verification and Acceptance or Rejection\">Verification and Acceptance or Rejection<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-21\" href=\"https:\/\/swaritadvisors.com\/blog\/process-for-buyback-of-shares\/#Maintenance_of_Register_for_Shares_and_Securities\" title=\"Maintenance of Register for Shares and Securities\">Maintenance of Register for Shares and Securities<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-22\" href=\"https:\/\/swaritadvisors.com\/blog\/process-for-buyback-of-shares\/#Furnish_Return_for_Buyback\" title=\"Furnish Return for Buyback\">Furnish Return for Buyback<\/a><\/li><\/ul><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-23\" href=\"https:\/\/swaritadvisors.com\/blog\/process-for-buyback-of-shares\/#Conclusion\" title=\"Conclusion\">Conclusion<\/a><\/li><\/ul><\/nav><\/div>\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Concept_of_Buyback_of_Shares\"><\/span>Concept of Buyback of Shares<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>The term <strong><a href=\"https:\/\/swaritadvisors.com\/buyback-of-shares\" class=\"text-primary\">Buyback of Shares<\/a><\/strong>\nor Stock Buyback denotes a corporate action wherein the company repurchases its\nissued shares from the existing shareholders. Further, during stock buyback,\nthe price of a share is usually higher than the market price. Also, it shall be\nrelevant to state that there must be at least one year gap between two\nbuybacks, and the debt \u2013 equity ratio for the company must not exceed the\nthreshold of 2:1.<\/p>\n\n\n\n<p><strong>At present, the companies undergoing the process for\nBuyback of Shares are as follows:<\/strong><\/p>\n\n\n\n<table class=\"wp-block-table\"><tbody><tr><td>\n  <strong>Name of the Company<\/strong><strong><\/strong>\n  <\/td><td>\n  <strong>Opening Date for Issue <\/strong><strong><\/strong>\n  <\/td><td>\n  <strong>Closing Date for Issue <\/strong><strong><\/strong>\n  <\/td><td>\n  <strong>Offer Price&nbsp; &nbsp;&nbsp;<\/strong><strong><\/strong>\n  <\/td><\/tr><tr><td>\n  GAIL India Limited\n  <\/td><td>\n  25.02.2021\n  <\/td><td>\n  10.03.2021\n  <\/td><td>\n  150\n  <\/td><\/tr><tr><td>\n  National Aluminium\n  Company Limited\n  <\/td><td>\n  25.02.2021\n  <\/td><td>\n  10.03.2021\n  <\/td><td>\n  57.5\n  <\/td><\/tr><\/tbody><\/table>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Reasons_to_Choose_the_Process_for_Buyback_of_Shares_in_India\"><\/span>Reasons to Choose the Process for Buyback of Shares in India<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>The reasons to choose the process for Buyback of Shares in India are as follows:<\/p>\n\n\n\n<div class=\"wp-block-image\"><figure class=\"aligncenter is-resized\"><img decoding=\"async\" loading=\"lazy\" src=\"https:\/\/swaritadvisors.com\/blog\/wp-content\/uploads\/2021\/03\/Increases-Earning-Per-Share-of-the-Company-1024x284.png\" alt=\"Reasons to Choose the Process for Buyback of Shares\" class=\"wp-image-2853\" width=\"724\" height=\"200\" srcset=\"https:\/\/swaritadvisors.com\/blog\/wp-content\/uploads\/2021\/03\/Increases-Earning-Per-Share-of-the-Company-1024x284.png 1024w, https:\/\/swaritadvisors.com\/blog\/wp-content\/uploads\/2021\/03\/Increases-Earning-Per-Share-of-the-Company-300x83.png 300w, https:\/\/swaritadvisors.com\/blog\/wp-content\/uploads\/2021\/03\/Increases-Earning-Per-Share-of-the-Company-768x213.png 768w, https:\/\/swaritadvisors.com\/blog\/wp-content\/uploads\/2021\/03\/Increases-Earning-Per-Share-of-the-Company.png 1500w\" sizes=\"(max-width: 724px) 100vw, 724px\" \/><\/figure><\/div>\n\n\n\n<ul><li>Increases Earning Per Share of the Company;<\/li><li>Offers Funds instead of Dividends to Shareholders;<\/li><li>Protects Company against Hostile Takeovers;<\/li><li>Maintains Debt Equity Ratio;<\/li><li>Provide an Exit Route to the Shareholders;<\/li><li>Increases Return on Capital;<\/li><li>Increases Return on Investment;<\/li><li>Services Equity more Effectively;<\/li><li>Reduces Share Capital of the Company;<\/li><\/ul>\n\n\n\n<p><strong>Also, Read:<\/strong> <mark style=\"background: #fffd03 !important;\"><a href=\"https:\/\/swaritadvisors.com\/learning\/what-you-need-to-know-about-buyback-of-shares-under-sebi-norms\/\">What you need to know about Buyback of Shares under SEBI Norms?<\/a><\/mark><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Laws_Governing_the_Process_for_Buyback_of_Shares_in_India\"><\/span>Laws Governing the Process for Buyback of Shares in India<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>The laws\ngoverning the process for Buyback of Shares in India are as follows:<\/p>\n\n\n\n<ul><li>Section 68 \u2013 70 of the Companies Act 2013;<\/li><li>Rule 17 of the Companies (Share Capital &amp;\nDebentures) Rules 2014;<\/li><li>SEBI (Buyback of Securities Amendment) Regulations\n2013;<\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Modes_for_Buyback_of_Shares_in_India\"><\/span>Modes for Buyback of Shares in India<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Based on the\nprovisions of section 68 (5) of the Companies Act 2013, the different modes for\nBuyback of Shares in India are as follows:<\/p>\n\n\n\n<ul><li>From the Open Market;<\/li><li>From the Existing Shareholders on Proportionate basis;<\/li><li>By Purchasing Shares from the Employees under the\nscheme of Sweat Equity and ESOP;<\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Sources_for_the_Process_of_Buyback_of_Shares_in_India\"><\/span>Sources for the Process of Buyback of Shares in India<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>The different sources for the process of buyback of shares in India are as follows:<\/p>\n\n\n\n<div class=\"wp-block-image\"><figure class=\"aligncenter is-resized\"><img decoding=\"async\" loading=\"lazy\" src=\"https:\/\/swaritadvisors.com\/blog\/wp-content\/uploads\/2021\/03\/Free-Reserves.png\" alt=\"Sources for the Process of Buyback of Shares\" class=\"wp-image-2852\" width=\"583\" height=\"190\" srcset=\"https:\/\/swaritadvisors.com\/blog\/wp-content\/uploads\/2021\/03\/Free-Reserves.png 932w, https:\/\/swaritadvisors.com\/blog\/wp-content\/uploads\/2021\/03\/Free-Reserves-300x98.png 300w, https:\/\/swaritadvisors.com\/blog\/wp-content\/uploads\/2021\/03\/Free-Reserves-768x251.png 768w\" sizes=\"(max-width: 583px) 100vw, 583px\" \/><\/figure><\/div>\n\n\n\n<ul><li>Free Reserves;<\/li><li>Securities Premium Account;<\/li><li>Out of the Proceeds of Fresh Issue;<\/li><\/ul>\n\n\n\n<p>It shall be\nnoted that a company is not eligible to repurchase its shares from the proceeds\nof the previous issue.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Conditions_for_the_Process_for_Buyback_of_Shares_in_India\"><\/span>Conditions for the Process for Buyback of Shares in India<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>The conditions\nrequired for the process for buyback of shares in India are as follows:<\/p>\n\n\n\n<ul><li>The AOA of the company must allow the process for\nbuybacks;<\/li><li>A company is allowed to buyback only up to 25% of the total\npaid up share capital and free reserves;<\/li><li>&nbsp;The debt \u2013\nequity of a company must not exceed the ratio of 2:1 after the completion of\nthe process for buyback;<\/li><li>&nbsp;All the shares\nand securities must be fully paid up;<\/li><li>Whenever a company wants to buyback 10% of its shares,\nit needs to pass an ordinary resolution;<\/li><li>Whenever a company wants to buyback 25% of the total\npaid-up capital and free reserves, it needs to pass an SR (Special Resolution);<\/li><li>There should be a minimum of one year gap between the\ntwo buybacks;<\/li><li>A company is not permitted to buyback its share again\nfor the period of six months from the date of completion of buyback;<\/li><li>After announcing the offer to the shareholders, a\ncompany cannot withdraw the said offer of buyback;<\/li><li>A company is not allowed to utilise any borrowed\namount from the financial institutions;<\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Steps_involved_in_the_Process_for_Buyback_of_Shares_in_India\"><\/span>Steps involved in the Process for Buyback of Shares in India<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>The steps involved in the process for buyback of shares in India are as follows:<\/p>\n\n\n\n<div class=\"wp-block-image\"><figure class=\"aligncenter is-resized\"><img decoding=\"async\" loading=\"lazy\" src=\"https:\/\/swaritadvisors.com\/blog\/wp-content\/uploads\/2021\/03\/Through-Ordinary-Resolution.png\" alt=\"Process for Buyback of Shares\" class=\"wp-image-2855\" width=\"539\" height=\"277\" srcset=\"https:\/\/swaritadvisors.com\/blog\/wp-content\/uploads\/2021\/03\/Through-Ordinary-Resolution.png 929w, https:\/\/swaritadvisors.com\/blog\/wp-content\/uploads\/2021\/03\/Through-Ordinary-Resolution-300x154.png 300w, https:\/\/swaritadvisors.com\/blog\/wp-content\/uploads\/2021\/03\/Through-Ordinary-Resolution-768x395.png 768w\" sizes=\"(max-width: 539px) 100vw, 539px\" \/><\/figure><\/div>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Through_Ordinary_Resolution\"><\/span>Through Ordinary Resolution<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>If in case a company wish to buyback 10% or less of\nits total paid-up share capital and free reserves:<\/p>\n\n\n\n<h4 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Sent_the_Notice\"><\/span>Sent the Notice<span class=\"ez-toc-section-end\"><\/span><\/h4>\n\n\n\n<p>In the first step, the company requires to send notice\nto the Directors at least seven days prior to the date of the BM (Board Meeting).<\/p>\n\n\n\n<h4 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Pass_the_Board_Resolution\"><\/span>Pass the Board Resolution<span class=\"ez-toc-section-end\"><\/span><\/h4>\n\n\n\n<p>After that, the directors need to authorise the\nprocess of buyback by passing an Ordinary Resolution in the meeting.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Through_Special_Resolution\"><\/span>Through Special Resolution\n<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>If in case the process for Buyback of shares is above 10% but up to 25% of the total paid up capital and free reserves, the steps to be followed are as follows:<\/p>\n\n\n\n<div class=\"wp-block-image\"><figure class=\"aligncenter is-resized\"><img decoding=\"async\" loading=\"lazy\" src=\"https:\/\/swaritadvisors.com\/blog\/wp-content\/uploads\/2021\/03\/Send-Notice-for-Board-Meeting-751x1024.png\" alt=\"Through Special Resolution under Buyback of Shares\" class=\"wp-image-2854\" width=\"373\" height=\"508\" srcset=\"https:\/\/swaritadvisors.com\/blog\/wp-content\/uploads\/2021\/03\/Send-Notice-for-Board-Meeting-751x1024.png 751w, https:\/\/swaritadvisors.com\/blog\/wp-content\/uploads\/2021\/03\/Send-Notice-for-Board-Meeting-220x300.png 220w, https:\/\/swaritadvisors.com\/blog\/wp-content\/uploads\/2021\/03\/Send-Notice-for-Board-Meeting-768x1047.png 768w, https:\/\/swaritadvisors.com\/blog\/wp-content\/uploads\/2021\/03\/Send-Notice-for-Board-Meeting.png 787w\" sizes=\"(max-width: 373px) 100vw, 373px\" \/><\/figure><\/div>\n\n\n\n<h4 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Send_Notice_for_Board_Meeting\"><\/span>Send Notice for Board Meeting<span class=\"ez-toc-section-end\"><\/span><\/h4>\n\n\n\n<p>In the first\nstep, the applicant needs to send a notice for BM (Board Meeting) to the\ndirectors at least seven days prior to the meeting date. Also, the said notice\nmust have the agenda of the Board Meeting.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Convene_Board_Meeting\"><\/span>Convene Board Meeting<span class=\"ez-toc-section-end\"><\/span><\/h4>\n\n\n\n<p>Now, the\ndirectors need to approve the following matters in the Board Meeting:<\/p>\n\n\n\n<ul><li>Process for Buyback of shares;<\/li><li>Approval of the Notice for EGM, together with the\nexplanatory statements;<\/li><li>Fix date, time, venue of the meeting;<\/li><\/ul>\n\n\n\n<h4 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Send_Notice_for_Extraordinary_General_Meeting\"><\/span>Send Notice for Extraordinary General Meeting<span class=\"ez-toc-section-end\"><\/span><\/h4>\n\n\n\n<p>The company\nneeds to dispatch the notice for meeting at least twenty one days before.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Convene_EGM\"><\/span>Convene EGM<span class=\"ez-toc-section-end\"><\/span><\/h4>\n\n\n\n<p>In EGM, the\nshareholders need to pass a special resolution for authorising the process of\nBuyback.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Submit_Form_SH_8_and_MGT_14\"><\/span>Submit Form SH 8 and MGT 14<span class=\"ez-toc-section-end\"><\/span><\/h4>\n\n\n\n<p>After passing the SR (Special Resolution), Directors\nof the concerned company are required to submit form MGT 14 with the ROC within\nthirty days from the date of the EGM. Further, the attachments of Form MGT &#8211; 14\nare as follows:<\/p>\n\n\n\n<ul><li>A certified copy\nof the Special Resolution (SR) passed, together with the Explanatory Statement;<\/li><\/ul>\n\n\n\n<p>Further, the company requires to file a Letter of\nOffer (LOF), together with the Form SH \u2013 8. The said form needs to be signed and\ncertified by at least two directors, out of which one must be the MD (Managing\nDirector) of the Company. <\/p>\n\n\n\n<p>Also, the attachments of Form SH &#8211; 8 are as follows:<\/p>\n\n\n\n<ul><li>Details\nregarding the Company\u2019s Promoters;<\/li><li>Declaration by\nthe Auditors;<\/li><li>A certified copy\nof the BR (Board Resolution) passed;<\/li><li>A copy of the\nnotice for the meeting, together with the Explanatory Statement;<\/li><li>Financial\nStatements for the last three financial years;<\/li><li>A complete list of\nthe total Holding and Subsidiary Companies;<\/li><li>A complete list\nof all the Buybacks for the previous three financial years;<\/li><\/ul>\n\n\n\n<p>Also, the company needs to file a declaration of\ninsolvency in Form SH &#8211; 8 must be filed, together with form SH &#8211; 9. The said\nform needs to be signed and certified by at least two directors, out of which\none of whom must be the MD (Managing Director) of the Company.&nbsp;&nbsp;&nbsp; <\/p>\n\n\n\n<h4 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Offer_Letter\"><\/span>Offer Letter<span class=\"ez-toc-section-end\"><\/span><\/h4>\n\n\n\n<p>Now in the next step of the process for Buyback of Shares in India, the company needs to send a Letter of Offer to the <a href=\"https:\/\/en.wikipedia.org\/wiki\/Shareholder\">Shareholders<\/a> within a period of twenty one days. Also, the said offer must not be open for a minimum of fifteen days and a maximum of thirty days, starting from the date of dispatch of the Letter of Offer.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Offer_Acceptance_by_Shareholders\"><\/span>Offer Acceptance by Shareholders<span class=\"ez-toc-section-end\"><\/span><\/h4>\n\n\n\n<p>If in case the\ncommunication of rejection is not made within a period of twenty one days from\nthe closure of the offer, then, in that case, the said offer will be deemed\naccepted by the shareholders.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Opening_of_bank_Account\"><\/span>Opening of bank Account<span class=\"ez-toc-section-end\"><\/span><\/h4>\n\n\n\n<p>Further, in the\nnext step of the process for buyback of shares in India, the director needs to\nopen a separate current bank account and needs to deposit the amount collected\nfor buyback in the same.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Verification_and_Acceptance_or_Rejection\"><\/span>Verification and Acceptance or Rejection<span class=\"ez-toc-section-end\"><\/span><\/h4>\n\n\n\n<p>The process of verification and acceptance of\nbuyback needs to be done within fifteen days from the closure of the offer.\nFurther, it shall be noted that the shares will be considered accepted if in\ncase no communication of rejection has been made within twenty one days from\nthe closure of the offer.<\/p>\n\n\n\n<p>Also, it shall be noted that the payment of\nconsideration must be made to the shareholders within a period of seven days,\nstarting from the date of acceptance and verification.<\/p>\n\n\n\n<p>If in case the shares are not accepted within the prescribed\ntime, then, in that case, the share certificate of those shareholders needs to\nbe returned within a period of seven days from the rejection.<\/p>\n\n\n\n<p>Moreover, the shares brought back must be destroyed\nby the company within seven days from the completion.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Maintenance_of_Register_for_Shares_and_Securities\"><\/span>Maintenance of Register for Shares and Securities<span class=\"ez-toc-section-end\"><\/span><\/h4>\n\n\n\n<p>The company must maintain a register of shares\nbrought back, based on Form SH &#8211; 10. Also, the said register is kept at the registered\noffice of the company.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Furnish_Return_for_Buyback\"><\/span>Furnish Return for Buyback<span class=\"ez-toc-section-end\"><\/span><\/h4>\n\n\n\n<p>In the last step of the process for Buyback of\nShares in India, the company requires to file the return concerning Buyback to\nthe Registrar of Companies within a period of thirty days from the completion\nof the process. <\/p>\n\n\n\n<p><strong>Further, the attachments\nrequired to be submitted with the form SH -11 are as follows: <\/strong><\/p>\n\n\n\n<ul><li>A copy of the\nSpecial Resolution (SR) passed at the EGM;<\/li><li>A copy of the\nBoard Resolution (BR) passed at the Board meeting;<\/li><li>Details\nconcerning the shares brought back;<\/li><li>A copy of the Audited\nBalance Sheet;<\/li><li>Details\nconcerning the securities holders, prior to the process of Buyback;<\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Conclusion\"><\/span>Conclusion<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>In a nutshell, Buyback of Shares signifies a corporate\naction in which the company involved repurchases its issued shares from the\nexisting shareholders. Further, it is a mode of Capital Restructure, and under\nthis, the price of a share is normally higher than the market price.<\/p>\n\n\n\n<p>Also, to undergo the process for Buyback of Shares in India, the different sources for the same are Free Reserves, Securities Premium Account, and Out of the Proceeds of Fresh Issue.<\/p>\n\n\n\n<p><strong>Also, Read:<\/strong> <mark style=\"background: #fffd03 !important;\"><a href=\"https:\/\/swaritadvisors.com\/learning\/procedure-for-buyback-of-shares-and-other-specified-securities\/\">Procedure for Buyback of Shares and Other Specified Securities<\/a><\/mark><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Whenever a company, whether a Private Limited Company or Public Limited Company, decides to restructure its capital to increase its EPS (Earning per Share) and to have good shareholder returns, it tends to undergo the process for Buyback of Shares in India. Further, the best time for the process of Buyback of Shares is when [&hellip;]<\/p>\n","protected":false},"author":2,"featured_media":2851,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[444,56],"tags":[445],"acf":[],"_links":{"self":[{"href":"https:\/\/swaritadvisors.com\/blog\/wp-json\/wp\/v2\/posts\/2850"}],"collection":[{"href":"https:\/\/swaritadvisors.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/swaritadvisors.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/swaritadvisors.com\/blog\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/swaritadvisors.com\/blog\/wp-json\/wp\/v2\/comments?post=2850"}],"version-history":[{"count":5,"href":"https:\/\/swaritadvisors.com\/blog\/wp-json\/wp\/v2\/posts\/2850\/revisions"}],"predecessor-version":[{"id":2860,"href":"https:\/\/swaritadvisors.com\/blog\/wp-json\/wp\/v2\/posts\/2850\/revisions\/2860"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/swaritadvisors.com\/blog\/wp-json\/wp\/v2\/media\/2851"}],"wp:attachment":[{"href":"https:\/\/swaritadvisors.com\/blog\/wp-json\/wp\/v2\/media?parent=2850"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/swaritadvisors.com\/blog\/wp-json\/wp\/v2\/categories?post=2850"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/swaritadvisors.com\/blog\/wp-json\/wp\/v2\/tags?post=2850"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}