Board Resolution: Buyback of Shares (Section 68)
Approve a buyback of a company's own shares, with the size, price, method and source of funds, within the limits of Section 68.
What it is
A company can buy back its own shares under Section 68 of the Companies Act, 2013 out of free reserves, securities premium or the proceeds of a different issue of shares. A buyback of up to 10% of paid-up equity capital and free reserves can be approved by the board; up to 25% needs a special resolution of members. The articles must authorise it, and the debt-equity ratio after the buyback must not exceed 2:1 unless a higher ratio is notified.
When it is used
- Returning surplus cash to shareholders.
- Consolidating shareholding of promoters.
- Providing an exit to some shareholders in an unlisted company.
What the template covers
- Company name, CIN and meeting details
- Approval route
- Method of buyback
- Number of shares and maximum price
- Maximum buyback value
- Source of funds and authorisation
Details you will need
The generator asks for the following. Fields marked with an asterisk in the form are required; the rest can be left blank and filled in later in Word.
Company
Company Name; CIN; Registered Office
Meeting
Board Meeting Date; Place
Buyback
Approval Route; Method of Buyback; Number of Shares to be Bought Back; Maximum Buyback Price per Share (₹); Maximum Buyback Value (₹); Source of Funds
Authentication
Chairman Name; Chairman DIN
Stamp duty, registration and filing
Only one buyback is allowed in 12 months. The company files the letter of offer in Form SH-8 and a declaration of solvency in Form SH-9, completes the buyback within one year, extinguishes the shares within seven days of completion and files a return in Form SH-11 within 30 days. For buybacks from 1 October 2024, the amount paid is taxed as dividend in the hands of shareholders, and the earlier tax on the company was withdrawn.
Generate the BR — Buyback of Shares
Fill in the form and download the draft as a Word file. It is a general template, not legal or professional advice; have it reviewed for your facts before you sign or rely on it.
Need this checked against your facts, or the registration or filing that follows (e.g. the related MCA e-form)? Contact SKAG and Associates
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Frequently asked questions
Can the board approve a buyback without shareholders?
Yes, up to 10% of paid-up equity capital and free reserves. A buyback up to 25% needs a special resolution.
How is a buyback taxed now?
For buybacks from 1 October 2024, the amount received is taxed as dividend in the shareholder's hands, and the cost of the shares is a capital loss.
How often can a company buy back shares?
Not more than once in 12 months.
This page gives general information for reference only. Laws, stamp duty rates and filing requirements change and differ between States, so confirm the current position for your case. Related: all document templates · free tax calculators · compliance calendar and guides.