Under Section 68 Companies Act 2013, a company may BUY-BACK its own shares from:
Answer & Solution
Correct answer: B.
1. Section 68(1) Companies Act 2013: '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 (in this section 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.'
2. Proviso: no buy-back of any kind of shares/securities shall be made out of proceeds of an earlier issue of THE SAME KIND of shares or securities.
3. Buy-back limits: 10% of paid-up equity + free reserves (Board approval); 25% of paid-up equity + free reserves (Special Resolution).
4. SEBI (Buy-Back of Securities) Regulations 2018 for listed companies.
5. Hence option B is correct.
_Source: Companies Act 2013 (Act 18 of 2013), Govt. of India MCA — Companies Act 2013, Section 68_
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