Buyback of Securities & Differential RightsMCQQuestion 5721 of 6

Which of the following is a requirement for a company to buy back its securities under the Companies Act, 2013?

Options

AThe company must have a minimum net worth of

Rs. 5 ext{ crores}

BThe company must have a maximum debt-to-equity ratio of 2:1

CThe company must have completed a minimum of 3 years since incorporation

DThe company must have a special resolution authorizing the buyback

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Correct Answer

✅ Option D — The company must have a special resolution authorizing the buyback

All Options:

AThe company must have a minimum net worth of $Rs. 5 ext{ crores}$
BThe company must have a maximum debt-to-equity ratio of 2:1
CThe company must have completed a minimum of 3 years since incorporation
DThe company must have a special resolution authorizing the buyback ✓

Detailed Solution & Explanation

The Companies Act, 2013 requires that a company must have a special resolution authorizing the buyback of its securities. This is to ensure that the shareholders are aware of and have approved the buyback.

This solution has been verified by multiple AI reviewers for accuracy.

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