New Enroll in RBI Grade B New Batch - Starts on May 21

    Question

    State which of the following statements is

    true?
    A Buy-back is for more than twenty-five per cent of the total paid-up capital and free reserves of the company. Correct Answer Incorrect Answer
    B Partly paid shares cannot be bought back by a company. Correct Answer Incorrect Answer
    C Buy-back of equity shares in any financial year shall exceed twenty-five per cent of its total paid-up equity capital in that financial year. Correct Answer Incorrect Answer
    D Partly paid shares can be bought back by a company. Correct Answer Incorrect Answer
    E None of the above Correct Answer Incorrect Answer

    Solution

    Partly paid shares refer to shares for which the shareholder has paid only a portion of the total amount due on the shares. According to company law in many jurisdictions, including India, companies are generally not permitted to buy back partly paid shares.

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