A share buyback is a transaction in which a company purchases its own shares or other specified securities, subject to the Companies Act, applicable rules and, for listed securities, the relevant SEBI framework. CorporateWalla assists eligible companies with buyback route assessment, corporate approvals, documentation, offer compliance, extinguishment records and applicable MCA filing support.
Important: A buyback is not the same as a shareholder-to-shareholder transfer, capital reduction or redemption of preference shares.
Subject to the law and transaction objectives, a company may consider a buyback for:
A buyback does not automatically mean that a company's shares are undervalued or that shareholders will benefit financially.
The company purchases its own shares or specified securities.
An existing shareholder transfers shares to another person. The company is not the purchaser merely because the share transfer occurs.
A reduction of share capital follows a different statutory process and is not interchangeable with a buyback. See Capital Reduction.
Redemption of redeemable preference shares or debentures follows the provisions applicable to those securities and should not be described as a buyback merely because securities are being returned to the company.
A buyback generally requires review of:
Section 68 contains, among other conditions, a general 25% ceiling based on the statutory capital/free-reserve framework, with specific treatment for equity shares.
A buyback of 10% or less of total paid-up equity capital and free reserves can fall within the Board-authorised route under Section 68, subject to the remaining statutory conditions.
These percentages should not be treated as a standalone eligibility test; the complete statutory framework must be checked.
Section 70 restricts buyback in specified circumstances.
Important checks include whether the company has defaulted in:
Other statutory compliance defaults can also affect eligibility.
The statutory framework contains a cure-period mechanism for specified defaults. The exact eligibility should be reviewed rather than applying a blanket “three-year rule” to every situation.
The Companies Act contains a restriction on making another buyback within one year from the closure of the preceding buyback offer.
The company should therefore review:
Section 68 also restricts a company from making a further issue of the same kind of shares or specified securities within six months after completing a buyback, subject to statutory exceptions such as specified bonus issues and discharge of subsisting obligations.
This restriction should be checked against the proposed fundraising or conversion plan before the buyback is approved. See Share Issue.
The Companies Act and applicable rules form the primary framework, subject to the company's status and transaction.
Listed companies must also comply with the applicable SEBI buyback regulations, stock-exchange requirements and disclosure obligations.
Buyback transactions can have tax consequences for:
The tax treatment can depend on:
Board authority depends on the statutory size and conditions.
The buyback must be authorised by the Articles.
The statutory calculation has specific rules, including separate treatment for equity shares.
The post-buyback debt-to-capital/free-reserve ratio must be checked.
Section 68 requires the securities bought back to be fully paid-up.
The one-year restriction from the preceding offer must be checked.
The six-month post-buyback issue restriction should be considered before a fundraising plan is approved.
Outstanding defaults can prevent a buyback.
SEBI rules can materially change the process.
Purchase alone does not complete the compliance cycle.
The timeline depends on:
Section 68 provides an overall statutory completion period, but the practical timeline differs by transaction.
Pick the speed and depth that matches your need. Same quality, same CA team — only the timeline changes.
Timeline: Quoted on company type, buyback size and route
Timeline: Quoted on shareholders, offer route and documentation
Timeline: Quoted on SEBI, FEMA and tax coordination scope
Government fee — paid by you at actuals
Government fees, stock-exchange/depository charges, valuation and legal costs are separate from the professional fee and are identified where applicable.
Every price above is a professional fee, excluding GST and government charges. 50% on delivery.
Buyback compliance is quoted on scope, because the fee depends on company type, buyback size, listed/unlisted status, number of shareholders, offer route, documentation, filings and any SEBI, FEMA or tax coordination. Professional fees exclude GST and government or third-party charges.
Review company type, Articles, paid-up capital, free reserves, securities premium, debt, existing defaults, previous buyback, outstanding securities and listed/unlisted status.
The route can depend on size, shareholder approval, listed/unlisted status, applicable SEBI rules and offer structure.
For the Board-authorised route, the Board passes the required resolution within the statutory limits; a larger buyback requiring shareholder approval follows the general-meeting process.
Where Section 68 requires a special resolution, prepare the notice, explanatory statement, material disclosures, buyback terms, funding details and proposed completion period, based on the exact transaction.
Establish the number of securities, buyback price, maximum consideration, funding source, eligible holders and route of purchase. For listed securities, SEBI regulations and stock-exchange requirements apply.
Depending on the transaction: Board resolution, special resolution, explanatory statement, offer document, declaration/solvency documentation, shareholder communication, buyback register and extinguishment records.
Complete the purchase in accordance with the approved terms. The statutory framework requires a buyback to be completed within one year from the relevant Board/special resolution.
Shares bought back must be extinguished and physically destroyed within the statutory period after completion; for dematerialised securities, coordinate with the relevant depository/market infrastructure.
Where shares are bought back out of free reserves or securities premium, Section 69 requires transfer of an amount equal to the nominal value of the shares bought back to the Capital Redemption Reserve.
Complete the prescribed post-buyback filings, including SH-11 where applicable, and the prescribed compliance certificate/documentation within the statutory period.
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Eligibility, funding source, size limits, debt ratio, Section 70 defaults and previous buybacks are checked before a route is chosen.
Board resolutions, and where Section 68 requires it, the special resolution, notice and explanatory statement, drafted for the exact transaction.
Offer document, declaration/solvency documentation, shareholder communication and the buyback register prepared to the approved terms.
Extinguishment records, Capital Redemption Reserve transfer where required, and SH-11 and other post-buyback filing support.
Custom quote • Scope-based
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From ₹3,499 • 5–15 days (indicative)
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From ₹999 • 5–10 days (indicative)
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From ₹4,999 • 7–15 days (indicative)
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Custom quote • Scope-based
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From ₹2,999 • Annual
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From ₹4,999 • 15–30 days (indicative)
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