Kindly guide me on the provisions of opening of Escrow Account and Special Bank Account and percentage of amount to be deposited therein and other relatable provisions with regards to Buy-back of Equity Shares by a Private Limited Comapny under Companies Act, 1956.
Private Limited Company & Unlisted Public Limited Company (Buyback of Securities), Rules, 1999 make no requirement to open an escrow account. However, they require that the company shall ensure that funds are available to carry out the buyback. However, the special bank account for making payments is required to be opened only after the offer closes.
OPENING SPECIAL ACCOUNT
A special account has to be opened with the bankers , immediately after the date of closure of the offer and deposit therein such sum due as would make up the entire sum due and payable as consideration for buy-back in terms of Regulations.
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