Question

MTG Ltd wants to buyback its shares. What is the maximum limit up to which it is allowed to buy-back its shares in a year?

Q: Answer-MTG Ltd wants to buyback its shares. What is the maximum limit up to which it is allowed to buy-back...

Under Section 682c of the Companies Act, 2013 , a company is permitted to buy back a maximum of 25 or less of the aggregate of its paid-up capital and free reserves. The 25 limit is part of a broader set of conditions that must be fulfilled for a valid buyback under the Companies Act, 2013 The buyback must be authorized by the companys Articles of Association. All shares or securities for the buyback must be fully paid-up. The debt-to-equity ratio after the buyback must not exceed 21. The buyback process must be completed within one year from the date of passing the relevant Board or Special Resolution.