can any one let me know that can we start merger of two companies with in 6 months after completion of Buy Back process?
FYI, Buy back is done in transferee Company or as per sec 77A after completion of Buy back a company can not issue further share capital in any manner upto 6 months.
04 January 2010
Buy back of shares i as per the provisions of Section 77 a of the companies act 1956, and once the buy back process starts the capital is recast to for the increased portion of the buy back, and the same has to be intimated to the ROC.
Similarly the period of 6 months is allowed to complete the formalities and hence once the capital is reinstated then the company can go in for merger of the company with another company, hence the period of 6 months. A company cannot therefore issue further capital upto 6 months from the date of buy back any fresh capital...
As it can be logically understood had the company wanted to raise capital then the process of buy back would not have arisen at all, so where is the question of fresh issue of capital.
Therefore it can be concluded that no capital can be issued within 6 months from the date of buy back of shares.
CAclubindia
