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      Question

      A company cannot purchase its own shares or other

      specified securities out of____________
      A Free reserves Correct Answer Incorrect Answer
      B Securities Premium Account Correct Answer Incorrect Answer
      C Out of the proceeds of an earlier issue of the same kind of shares or other specified securities Correct Answer Incorrect Answer
      D Both a & b Correct Answer Incorrect Answer

      Solution

      Section 68.Power of company to purchase its own securities- (1) Notwithstanding anything contained in this Act, but subject to the provisions of sub-section (2), a company  may purchase its own shares or other specified  securities  (hereinafter referred to as buy-back) out of— (a) its  free reserves; (b) the securities premium account; or (c) the proceeds of the issue of any shares or other specified securities: Provided that no buy-back of any kind of shares or other specified securities shall be made out of the proceeds of an earlier issue of the same kind of shares or same kind of other specified securities.

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