Buy Back of Shares

Accountancy

If cash/bank balance is used for the purpose of buy back, do we have to create CRR Account?

Nova Shaji

CA Inter

★ 2K+

17-Oct-24 09:29

708

Answers (2)

If Buybacks are done from free reserves (which includes Security Premium Reserve in this case), as per Companies Act 2013, this will require CRR to be created

Vishnu Muraleedharan

CA Final

★ 32K+

17-Oct-24 10:40

If buyback is out of free reserves or securities premium account then a sum equal to nominal value of the shares purchased has to be transferred to the Capital Redemption Reserve Account (CRR) A/c.

Likith kumar Duganapalli

Moderator

17-Oct-24 15:34