Explain the concept of differential rights and its significance in the context of buyback of securities.
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Buyback of Securities & Differential RightsSubjectiveQuestion 5723 of 6
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Detailed Solution & Explanation
Differential rights refer to the varying rights and privileges attached to different classes of shares, such as voting rights, dividend rights, and redemption rights. In the context of buyback of securities, differential rights become significant as the company may choose to buy back shares with certain rights, such as non-voting shares or shares with limited dividend rights. The company must ensure that the buyback is made in accordance with the terms of the shares and the provisions of the Companies Act, 2013.
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