Value of Buy back of share issued at premium by a pvt co?

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Querist : Anonymous

Querist : Anonymous (Querist)

10 November 2010 A private limited company has earlier issued its share of Face Value Rs10 at a premium of Rs 90/-.
In six months time it wants to buy back its share. at what price it should be bought back i.e. at premium or face value or it could be done at a lower or higher rate?

CMA. CS. Sanjay Gupta

CMA. CS. Sanjay Gupta (Expert)
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10 November 2010 It should be bought back at book value per share.
Views of other experts also solicited.

Aditya Maheshwari

Aditya Maheshwari (Expert)
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10 November 2010 Should ideally be at book value or fair value of the share and not face value or issue price.

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Rasesh

Rasesh (Expert)
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10 November 2010 Please refer to Private Limited Company and Unlisted Public LimitedCompany (Buy-Back of Securities) Rules, 1999.

The Explanatory Statement set out alongwith the Special Resolution has to provide for the basis of arriving at the buy back price.

Hence, it is very clear that whatever the price the company decides has to be justifiable.

Querist : Anonymous

Querist : Anonymous (Querist)

16 November 2010 can u send me the link for Private Limited Company and Unlisted Public LimitedCompany (Buy-Back of Securities) Rules, 1999.

Aditya Maheshwari

Aditya Maheshwari (Expert)
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16 November 2010 visit this link
http://mca.gov.in/Ministry/actsbills/rules/PLCaUPLCBBoSR1999.pdf