Question One Private limited company wants to buy back its shares from the existing shareholders of the company. But the company has not distributed dividend for the Financial year 2013-14 due to dispute pending in the company. Now my query is company eligible to buy back shares?
Answer: As per Section 70(2) of the Companies Act 2013, no buy-back can be done in case the company has not complied with :
a) Section 92 (Annual Return),
b) Section 123 (manner of declaration of Dividend and its payment),
c) Section 127 (punishment for failure to distribute Dividend)
d) Section 129 (financial Statements or there should not be any qualifying remark
either on the Report of the Auditors or in the Notes and the financial statements should give true and fair view)
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