Is valuation report required for buyback of shares?

Valuation is not required but a valuation report can be obtained from a merchant banker, chartered accountant or a registered valuer for justifying the buyback price. Shares of Minority shareholding can be acquired at a price calculated by a registered valuer.

Is valuation report required for transfer of shares?

Section 247 of the Companies Act, 2013 (‘Act’ for short) provides that where a valuation is required to be made in respect of any property, stocks, shares, debentures, securities or goodwill or any other assets or net worth of a company or its liabilities under the provision of this Act, it shall be valued by a person …

What are the legal requirements for buyback of shares?

– The buyback is 25\% or lesser in the totality of paid-up capital and the company’s free reserves. If the equity shares are to be purchased back, the amount included in buyback should not go beyond 25\% of paid-up equity share capital in that particular financial year.

Which form is required by the company to register the buyback of shares?

Purpose of the eForm A company has to file return of buy back in eForm SH-11 to the Registrar within thirty days of completion of buy back containing the particulars of the buyback of shares and other securities. eForm Number as per Companies Act, 1956 Form 4C as per the Companies Act, 1956.

Is valuation report required?

Under the provisions of the Companies Act, a Registered Valuer’s report on valuation of equity shares is mandatory in the following situations: Issue of new shares to shareholders under Section 62 except in case of a rights issue. Allotment of shares for consideration other than cash and issue of sweat equity.

Can buyback be done below book value?

“If a comany buys back shares at a price lower than its FMV, such difference shall not be taxable in the hands of the company i.e. a buy back can be made at a price lower than the FMV or Book Value.” The appeal filed by the assessee is directed against the order dated 13.11.

Under what circumstances need for valuation of shares is done?

When is Valuation of shares required One of the important reason is when you are about to sell your business and you wanted to know your business value. When you approach your bank for a loan based on shares as a security. Merger, acquisition, reconstruction, amalgamation etc – valuation of shares is very important.

Why do we need valuation report?

Importance of a Valuation Report A business valuation report offers the owner of a firm a variety of data and numbers about the company’s true worth or value in terms of market competition, asset values, and income values. This is information that every business owner should have on hand.

What is the procedure of buyback of shares?

To be able to participate in a buyback process, the investor should be have held the shares of the company before the record date declared by the company in its announcement for buyback. The shares should be held in demat form. The last date for tendering of shares for buyback is disclosed by the company in the notice.

Is buyback compulsory for shareholders?

Many times a company has excess cash on its balance sheet which it wants to distribute amongst its shareholders. A buyback is one of the modes by which it can achieve its objectives. It is not necessary that preference shares must always be redeemed as they can also be the subject of a buy-back of shares.

Can buyback be done every year?

Post buy-back debt-equity ratio cannot exceed 2:1. Only fully paid up shares can be brought back in a financial year. Time limits: The buy-back should be completed within a period of one year from the date of passing of Special Resolution or Board Resolution, as the case may be.