{"id":6166,"date":"2019-08-30T19:05:05","date_gmt":"2019-08-30T13:35:05","guid":{"rendered":"https:\/\/swaritadvisors.com\/learning\/?p=6166"},"modified":"2021-03-02T17:07:43","modified_gmt":"2021-03-02T11:37:43","slug":"procedure-for-buyback-of-shares-and-other-specified-securities","status":"publish","type":"post","link":"https:\/\/swaritadvisors.com\/learning\/procedure-for-buyback-of-shares-and-other-specified-securities\/","title":{"rendered":"Procedure for Buyback of Shares and Other Specified Securities"},"content":{"rendered":"\n<p class=\"has-drop-cap\">Section 68 of the Companies Act, 2013 signifies that any company limited by shares or guarantees with share capital can opt for <strong><a href=\"https:\/\/swaritadvisors.com\/buyback-of-shares\" class=\"text-primary\">Buyback of Shares<\/a><\/strong> and other specified securities. Whether it\u2019s a listed or unlisted company, both can go for buy-back of shares. <\/p>\n\n\n\n<p>Earlier,\nthe concept of buyback was buried under the Companies Act, 1956 until it was\namended in the year 1999. Apart from this, section 68, 69 and 70 of the Companies\nAct, 2013 with the Rule 17 of the Companies (Shares Capital and Debentures)\nRules, 2014 governs the process of buyback of shares by the unlisted company. <\/p>\n\n\n\n<p>In this blog, we are going to learn the procedure for the buyback of shares and other specified securities in detail. From the regulatory framework to provisions and procedure, we will peep into every basic detail. So keep on reading. <\/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-6a549ba57383c\" 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-6a549ba57383c\"  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\/learning\/procedure-for-buyback-of-shares-and-other-specified-securities\/#What_is_Buyback_of_Shares\" title=\"What\nis Buyback of Shares?\">What\nis 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\/learning\/procedure-for-buyback-of-shares-and-other-specified-securities\/#Regulatory_Framework_for_Buyback_of_Shares\" title=\"Regulatory\nFramework for Buyback of Shares\">Regulatory\nFramework for Buyback of Shares<\/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\/learning\/procedure-for-buyback-of-shares-and-other-specified-securities\/#Modes_of_Buyback_of_Shares\" title=\"Modes\nof Buyback of Shares\">Modes\nof Buyback of Shares<\/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\/learning\/procedure-for-buyback-of-shares-and-other-specified-securities\/#Conditions_Requirements_for_Buyback_of_Shares_and_Other_Securities\" title=\"Conditions\n&amp; Requirements for Buyback of Shares and Other Securities \">Conditions\n&amp; Requirements for Buyback of Shares and Other Securities <\/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\/learning\/procedure-for-buyback-of-shares-and-other-specified-securities\/#Restrictions_on_Buyback\" title=\"Restrictions\non Buyback \">Restrictions\non Buyback <\/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\/learning\/procedure-for-buyback-of-shares-and-other-specified-securities\/#Procedure_for_Buyback_of_Shares_India\" title=\"Procedure\nfor Buyback of Shares India\">Procedure\nfor Buyback of Shares India<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/swaritadvisors.com\/learning\/procedure-for-buyback-of-shares-and-other-specified-securities\/#Step_1_Convene_the_Board_Meeting\" title=\"Step\n1: Convene the Board Meeting\">Step\n1: Convene the Board Meeting<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-8\" href=\"https:\/\/swaritadvisors.com\/learning\/procedure-for-buyback-of-shares-and-other-specified-securities\/#Step_2_Approval_for_EGM\" title=\"Step\n2: Approval for EGM \">Step\n2: Approval for EGM <\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-9\" href=\"https:\/\/swaritadvisors.com\/learning\/procedure-for-buyback-of-shares-and-other-specified-securities\/#Step_3_Send_the_notice_for_EGM\" title=\"Step\n3: Send the notice for EGM\">Step\n3: Send the notice for EGM<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-10\" href=\"https:\/\/swaritadvisors.com\/learning\/procedure-for-buyback-of-shares-and-other-specified-securities\/#Step_4_Passing_of_Special_Resolution_for_Buy-Back_of_Shares\" title=\"Step\n4: Passing of Special Resolution for Buy-Back of Shares\">Step\n4: Passing of Special Resolution for Buy-Back of Shares<\/a><\/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\/learning\/procedure-for-buyback-of-shares-and-other-specified-securities\/#Step_5_File_SH-8\" title=\"Step\n5: File SH-8\">Step\n5: File SH-8<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-12\" href=\"https:\/\/swaritadvisors.com\/learning\/procedure-for-buyback-of-shares-and-other-specified-securities\/#Step_6_Declaration_of_Solvency\" title=\"Step\n6: Declaration of Solvency\">Step\n6: Declaration of Solvency<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-13\" href=\"https:\/\/swaritadvisors.com\/learning\/procedure-for-buyback-of-shares-and-other-specified-securities\/#Step_7_Letter_of_Offer_to_the_Shareholders\" title=\"Step\n7: Letter of Offer to the Shareholders\">Step\n7: Letter of Offer to the Shareholders<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-14\" href=\"https:\/\/swaritadvisors.com\/learning\/procedure-for-buyback-of-shares-and-other-specified-securities\/#Step_8_Acceptance_of_Offer\" title=\"Step\n8: Acceptance of Offer\">Step\n8: Acceptance of Offer<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-15\" href=\"https:\/\/swaritadvisors.com\/learning\/procedure-for-buyback-of-shares-and-other-specified-securities\/#Step_9_Opening_of_a_Bank_Account\" title=\"Step\n9: Opening of a Bank Account\">Step\n9: Opening of a Bank Account<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-16\" href=\"https:\/\/swaritadvisors.com\/learning\/procedure-for-buyback-of-shares-and-other-specified-securities\/#Step_10_Filing_of_SH-11\" title=\"Step\n10: Filing of SH-11\">Step\n10: Filing of SH-11<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-17\" href=\"https:\/\/swaritadvisors.com\/learning\/procedure-for-buyback-of-shares-and-other-specified-securities\/#What_are_the_provisions_of_the_Buyback_of_Shares_under_Section_68\" title=\"What are the provisions of the Buyback of Shares under Section 68?\">What are the provisions of the Buyback of Shares under Section 68?<\/a><\/li><\/ul><\/nav><\/div>\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"What_is_Buyback_of_Shares\"><\/span>What\nis Buyback of Shares?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Buyback of Shares refers to the process by which a company re-purchases its shares by Buyback of Shares and other specified securities from its existing shareholders at a price higher than the market price.<\/p>\n\n\n\n<p>Besides,\nwhenever a company repurchases its shares, the outstanding shares in the market\nfall. The buy-back of shares is governed by Section 68 of the Companies Act,\n2013. <\/p>\n\n\n\n<p>Furthermore,\nit\u2019s a method of the cancellation of share capital. The buy-back of shares is\nalso referred to as \u2018share repurchase.\u2019 Generally, the need for buyback arises\nwhen the management considers that the shares are undervalued or if the\noutstanding shares are falling. <\/p>\n\n\n\n<div class=\"browse\">\n<p>Browse through our articles on services provided at <a href=\"https:\/\/swaritadvisors.com\">Swarit Advisors<\/a>, and just let us know if we can help you with your IPO or Comapny Takeover or SEBI Advisory Services.<\/p>\n<div class=\"browse1\">\n<table class=\"table1\">\n\n<tbody>\n<tr>\n<td><a href=\"https:\/\/swaritadvisors.com\/mergers-and-acquisitions\"><span>Mergers and Acquisitions<\/a>&nbsp;<\/span><\/td>\n<td><a href=\"https:\/\/swaritadvisors.com\/buyback-of-shares\"><span>Buyback of Shares<\/span><\/a><\/td>\n<td><a href=\"https:\/\/swaritadvisors.com\/merger-and-amalgamation\"><span>Merger and Amalgamation<\/span><\/a><\/td>\n<\/tr>\n<tr>\n<td><a href=\"https:\/\/swaritadvisors.com\/public-issues\"><span>Public Issues<\/span><\/a><\/td>\n<td><a href=\"https:\/\/swaritadvisors.com\/rights-issue\"><span>Rights Issue<\/span><\/a><\/td>\n<td><a href=\"https:\/\/swaritadvisors.com\/preferential-allotment\"><span>Preferential Allotment<\/span><\/a><\/td>\n<\/tr>\n<tr>\n<td><a href=\"https:\/\/swaritadvisors.com\/company-takeover\"><span>Company Takeover<\/span><\/a><\/td>\n<td><a href=\"https:\/\/swaritadvisors.com\/issue-of-debentures\"><span>Issue of Debentures<\/span><\/a><\/td>\n<td><a href=\"https:\/\/swaritadvisors.com\/insurance-broker-license\"><span>Insurance Broker License<\/span><\/a><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/table>\n<\/div>\n<\/div>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Regulatory_Framework_for_Buyback_of_Shares\"><\/span>Regulatory\nFramework for Buyback of Shares<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>The legal framework that regulates the buyback of shares and other specified securities are the following:<\/p>\n\n\n\n<ul><li>Companies Act, 2013;<\/li><li>Companies (Shares Capital &amp; Debenture) Rules 2014; and<\/li><li><a href=\"https:\/\/www.sebi.gov.in\/\">SEBI<\/a> (Buy-back of Securities Amendment) Regulations, 2013 as well as subsequent amendments thereafter. <\/li><\/ul>\n\n\n\n<table>\n<tbody>\n<tr>\n<td style=\"text-align: center;\"><strong>Class of Companies<\/strong><\/td>\n<td style=\"text-align: center;\"><strong>Regulation<\/strong><\/td>\n<\/tr>\n<tr>\n<td style=\"text-align: center;\">Buy-Back of Unlisted Public Company &amp; Private Limited Company<\/td>\n<td style=\"text-align: center;\">Section 68, 69, 70 of Companies Act, 2013 Rule 17 of Companies (Share Capital &amp; Debentures) Rule, 2014<\/td>\n<\/tr>\n<tr>\n<td style=\"text-align: center;\">Buy-Back for Listed Companies<\/td>\n<td style=\"text-align: center;\">Section 68, 69, 70 of Companies Act, 2013 Rule 17 of Companies (Share Capital &amp; Debentures) Rule, 2014 Securities Exchange Board of India (Buy-Back of Securities Amendment) Regulations, 2013 &nbsp;<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Modes_of_Buyback_of_Shares\"><\/span>Modes\nof Buyback of Shares<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>The shares can be bought back through\nany of the following:<\/p>\n\n\n\n<ul><li>The existing shareholders on the proportionate basis;<\/li><li>The Open Market; and<\/li><li>Buying shares from the employee under the Scheme of Sweat Equity or <strong><a href=\"https:\/\/swaritadvisors.com\/employee-stock-option-plan\" class=\"text-primary\">Employee Stock Option<\/a><\/strong>. <\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Conditions_Requirements_for_Buyback_of_Shares_and_Other_Securities\"><\/span>Conditions\n&amp; Requirements for Buyback of Shares and Other Securities <span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>According to new SEBI (Buy-back of Securities) Regulations, 2018, the applicant requires fulfilling the following conditions for buyback of shares and other specified securities:<\/p>\n\n\n\n<ul><li>The maximum limit of\nbuy-back of shares\/securities shall be 25% or less of the total paid-up capital\nand free reserves of the company.<\/li><\/ul>\n\n\n\n<p><strong>Note:<\/strong> The reference to 25% in this regulation, in respect of the buyback of shares and other specified securities in any of the financial year, implies its total paid-up equity capital in that FY.<\/p>\n\n\n\n<ul><li>The ratio of the\ntotal secures and unsecured debts that the company owes after buyback shouldn\u2019t\nbe more than twice the paid-up capital and free reserves.<\/li><\/ul>\n\n\n\n<p><strong><em>Condition:<\/em><\/strong><em> The Central\nGovernment may, by order, notify a higher ratio of the debt to capital and free\nreserves for a class or classes of companies. <\/em><\/p>\n\n\n\n<ul><li> All shares and other securities for buy-back should be wholly paid-up.<\/li><li>Companies may buy back their shares or other securities by any of the following means:<\/li><\/ul>\n\n\n\n<p><strong>a)<\/strong> The existing shares other specified security-holders on the basis of proportion through the tender offer;<\/p>\n\n\n\n<p><strong>b)<\/strong> Open market through:<\/p>\n\n\n\n<ol><li>Stock Exchange<\/li><li>Book-building process<\/li><\/ol>\n\n\n\n<p><strong>c)<\/strong> Odd-lot holder<\/p>\n\n\n\n<ul><li> A company could undertake a buy-back of its own shares or securities out of the following:<\/li><\/ul>\n\n\n\n<ol><li> Its free reserves,<\/li><li> The securities premium account, or<\/li><li> The proceeds of the issue of any shares or securities as specified:<\/li><\/ol>\n\n\n\n<p><strong>Condition:<\/strong> Any such buy-back shall not be made out of the proceeds of an earlier issue of the similar shares or other specified securities. <\/p>\n\n\n\n<p><strong>Note:<\/strong> For this regulation, \u201cfree reserves\u201d comprises a securities premium account.<\/p>\n\n\n\n<p><strong>Also, Read:<\/strong> <mark style=\"background: #fffd03 !important;\"><a href=\"https:\/\/swaritadvisors.com\/blog\/process-for-buyback-of-shares\/\">Process for Buyback of Shares in India: A Guide<\/a><\/mark><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Restrictions_on_Buyback\"><\/span>Restrictions\non Buyback <span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Along\nwith the above-described conditions, there are some restrictions on the\ncompanies opting for buy-back of shares. These are also a kind of condition\nthat the applicant company must follow. They are as follows: <\/p>\n\n\n\n<ul><li>A company can\u2019t buy-back its shares or other specified securities from any individual via negotiated deals, whether on or off the stock exchange or through any private arrangement or through spot transactions. <\/li><li>Companies cannot buy-back their shares or other specified securities from the stock exchange for the purpose of delisting their shares or other specified securities. <\/li><li>Companies can\u2019t offer any buy-back within a period of one year reckoned from the expiry date of the buyback period of the preceding offer of the buyback if any.<\/li><li>The company can\u2019t let buyback of its shares unless the consequent reduction of its share capital is affected. <\/li><li>A company can\u2019t purchase its own shares or other specified securities either directly or indirectly:<\/li><li>Through any subsidiary company consisting of its own subsidiary companies;<\/li><li>Via any investment company or group of investment companies; or<\/li><li>In case the company has made a default in the repayment of the deposits accepted either before or after the commencement of the Companies Act, interest payment thereon, redemption of debentures or preference shares or payment of dividend to any shareholder, or repayment of any term loan or interest payable thereon to any financial institution or banking company.<\/li><\/ul>\n\n\n\n<p><strong>Condition:<\/strong> The buyback isn\u2019t restricted, in case the company has resolved its default and it has lapsed a period of three years after such default. <\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Procedure_for_Buyback_of_Shares_India\"><\/span>Procedure\nfor Buyback of Shares India<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Now\nthat you are aware of the conditions and if you meet the requirements, then you\ncan go for the process for buyback of shares in India:<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Step_1_Convene_the_Board_Meeting\"><\/span>Step\n1: Convene the Board Meeting<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>Firstly,\nthe applicant needs to call a board meeting. For the same, a notice must be\nsent to the directors of the company at least 7 days prior to the date of the\nmeeting. <\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Step_2_Approval_for_EGM\"><\/span>Step\n2: Approval for EGM <span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>In\nthe board meeting, the applicant company needs to approve the buy-back, fix the\ndate of the EGM (Extra-Ordinary Meeting), and approve the EGM\u2019s notice along\nwith the explanatory statement under Section 102. <\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Step_3_Send_the_notice_for_EGM\"><\/span>Step\n3: Send the notice for EGM<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>Once\nthe notice for EGM is approved, the applicant must send it at least 21 days\nbefore the date of the meeting. <\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Step_4_Passing_of_Special_Resolution_for_Buy-Back_of_Shares\"><\/span>Step\n4: Passing of Special Resolution for Buy-Back of Shares<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>In the EGM, a special resolution must be passed for the approval of the Buy-back of shares. <\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Step_5_File_SH-8\"><\/span>Step\n5: File SH-8<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>After\nthe resolution has been passed, one must file the Letter of Offer in Form SH-8\nwith the Registrar. Furthermore, the form must contain the signature of two\ndirectors of the company.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Step_6_Declaration_of_Solvency\"><\/span>Step\n6: Declaration of Solvency<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>Along with the form SH-8, you need to annex form SH-9 which is the declaration of solvency. Again, the form must be signed by the two directors of the directors. <\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Step_7_Letter_of_Offer_to_the_Shareholders\"><\/span>Step\n7: Letter of Offer to the Shareholders<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>Within 20 days of the filing of SH-8 with the Registrar, the applicant needs to dispatch the \u2018Letter of Offer\u2019 to the shareholders of the company. Moreover, the Letter of Offer needs to be kept open for at least 15 days and a maximum of 30 days.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Step_8_Acceptance_of_Offer\"><\/span>Step\n8: Acceptance of Offer<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>The\nOffer will be considered as accepted if there\u2019s no communication of rejection\nwithin 21 days of offer closure. <\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Step_9_Opening_of_a_Bank_Account\"><\/span>Step\n9: Opening of a Bank Account<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>So,\nif the shareholders have accepted the offer, the applicant company has to open\na separate bank account. Besides, the total consideration amount for the shares\noffered to be paid in Buy-back should be deposited in a separate bank account. <\/p>\n\n\n\n<p>Furthermore, the consideration must be paid within seven days of verification. Moreover, shares that are to be bought back should be destroyed within seven days of the completion of buyback. <\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Step_10_Filing_of_SH-11\"><\/span>Step\n10: Filing of SH-11<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>Lastly,\nthe applicant needs to file form SH-11 within thirty days of the completion of\nthe buyback return. <\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"What_are_the_provisions_of_the_Buyback_of_Shares_under_Section_68\"><\/span>What are the provisions of the Buyback of Shares under Section 68?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>In any case, the company is found to make any default in the process under Section 68 of the Companies Act, 2013, or any listed company of any regulation made by SEBI, then-<\/p>\n\n\n\n<ul><li>Such a company would be subject to a fine of not less than \u20b91 lakh. In fact, it would exceed up to \u20b93 lakhs.<\/li><li>Every such officer engaged in the process who is in default shall be punishable for a period that could extend up to three years or fine with an amount not less than \u20b91 lakh.<\/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","protected":false},"excerpt":{"rendered":"<p>Section 68 of the Companies Act, 2013 signifies that any company limited by shares or guarantees with share capital can opt for Buyback of Shares and other specified securities. Whether it\u2019s a listed or unlisted company, both can go for buy-back of shares. Earlier, the concept of buyback was buried under the Companies Act, 1956 [&hellip;]<\/p>\n","protected":false},"author":6,"featured_media":6167,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[1117,546],"tags":[1118],"_links":{"self":[{"href":"https:\/\/swaritadvisors.com\/learning\/wp-json\/wp\/v2\/posts\/6166"}],"collection":[{"href":"https:\/\/swaritadvisors.com\/learning\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/swaritadvisors.com\/learning\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/swaritadvisors.com\/learning\/wp-json\/wp\/v2\/users\/6"}],"replies":[{"embeddable":true,"href":"https:\/\/swaritadvisors.com\/learning\/wp-json\/wp\/v2\/comments?post=6166"}],"version-history":[{"count":19,"href":"https:\/\/swaritadvisors.com\/learning\/wp-json\/wp\/v2\/posts\/6166\/revisions"}],"predecessor-version":[{"id":18127,"href":"https:\/\/swaritadvisors.com\/learning\/wp-json\/wp\/v2\/posts\/6166\/revisions\/18127"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/swaritadvisors.com\/learning\/wp-json\/wp\/v2\/media\/6167"}],"wp:attachment":[{"href":"https:\/\/swaritadvisors.com\/learning\/wp-json\/wp\/v2\/media?parent=6166"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/swaritadvisors.com\/learning\/wp-json\/wp\/v2\/categories?post=6166"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/swaritadvisors.com\/learning\/wp-json\/wp\/v2\/tags?post=6166"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}