Bizbits

Unlisted cos allowed buyback

NEW DELHI: The Department of Company Affairs DCA has allowed unlisted and private limited companies to buy back their shares and other securities from its existing shareholders. According to DCA, a company may buy back its shares from its shareholders on a proportionate basis through private offers and by purchasing securities issued to the employees of the company under the stock option scheme of sweat equity.

A company which has been authorised by a special resolution should before the buy-back of shares, file with RoC a draft letter of offer and declaration of solvency. The company should extinguish and physically destroy the share certificates bought back within seven days from the date of acceptance of shares.