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mediumMCQCUET Accountancy 2023 20 June Shift 22026Accountancy
1 mark

Arrange the following legal requirements and processes in the correct logical order for a corporate "Buyback of Shares".A. The Articles of Association must explicitly authorize the buyback of shares.B. The entire buyback process must be completed within 12 months from the date of passing the resolution.C. The post-buyback debt-to-equity ratio must not exceed .D. A Special Resolution must be passed during the general meeting.E. A formal Declaration of Solvency must be filed with the Registrar of Companies and SEBI.Choose the correct answer from the options given below:

  1. A
    A, D, C, B, E
  2. B
    B, C, D, E, A
  3. C
    C, D, E, A, B
  4. D
    D, E, B, C, A

Solution & Step-by-step Explanation

Section 68 of the Companies Act, 2013 outlines the procedural order for a share buyback:\begin{enumerate}\item \textbf{A}: First, check if the corporate bylaws (\textbf{Articles of Association}) authorize a buyback.\item \textbf{D}: Next, convene a meeting and pass a \textbf{Special Resolution}.\item \textbf{C}: Ensure structural safety limits are met, meaning the post-buyback \textbf{debt-equity ratio does not cross }.\item \textbf{B}: Set up the execution roadmap, noting that the entire buyback must be wrapped up \textbf{within 12 months}.\item \textbf{E}: Finally, before buying back the shares, file a \textbf{Declaration of Solvency} with the Registrar and SEBI to verify financial stability.\end{enumerate}This structures the correct legal sequence as: A, D, C, B, E.

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Arrange the following legal requirements and processes in the correct logical order for a corporate "Buyback of Shares".A. The Articles of Association must explicitly authorize the buyback of shares.B. The entire buyback process must be completed within 12 months from the date of passing the resolution.C. The post-buyback debt-to-equity ratio must not exceed .D. A Special Resolution must be passed during the general meeting.E. A formal Declaration of Solvency must be filed with the Registrar of Companies and SEBI.Choose the correct answer from the options given below:
A
A, D, C, B, E
B
B, C, D, E, A
C
C, D, E, A, B
D
D, E, B, C, A

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