Buy Back of Shares
Overview – Buyback of Shares
shareholders. This process reduces the number of outstanding shares in the market, effectively increasing the value of remaining shares and consolidating ownership.
Companies undertake buybacks to utilize surplus cash, improve earnings per share (EPS), and signal confidence in their future prospects. The buyback can be done through various routes such as tender offer, open market purchase, or through book-building, as permitted under the Companies Act, 2013 and SEBI Buyback Regulations (for listed companies).
At Cardiff Services, we assist companies in executing buyback transactions seamlessly, ensuring compliance with all regulatory requirements, from board approvals to filings with the Registrar of Companies (RoC) and SEBI, where applicable.
Features – Buyback of Shares
Reduction in Share Capital
Buyback reduces the total number of outstanding shares, leading to increased ownership percentage for remaining shareholders.Utilization of Surplus Funds
Excess cash or free reserves are effectively used, improving capital efficiency.Improves Earnings Per Share (EPS)
With fewer shares in circulation, EPS typically increases, enhancing shareholder value.Board and Shareholder Approval Required
Buyback must be approved by the Board of Directors and, in some cases, by the shareholders.Regulated under Companies Act, 2013
Governed by Sections 68 to 70 of the Companies Act, and SEBI regulations (for listed entities).Multiple Buyback Methods
Can be carried out via tender offer, open market purchase, or book-building process.Limitations on Buyback
Capped at 25% of paid-up capital and free reserves in a financial year; debt-equity ratio must remain within prescribed limits.No Fresh Issue for 6 Months
Company cannot issue the same kind of securities for 6 months post-buyback, except in certain cases.Promotes Investor Confidence
Signals financial strength and management’s confidence in the company’s future.Return Filing Obligations
Mandatory filings such as Form SH-8, SH-9, SH-11, and public disclosures (for listed companies) are required.
Documents Required – Buyback of Shares
Board Resolution approving the buyback proposal
Special Resolution passed by shareholders (if required)
Notice and explanatory statement for the General Meeting
Copy of the company’s latest audited financial statements
Declaration of solvency by directors (Form SH-8)
Report of the Board of Directors justifying the buyback
Public announcement (for listed companies) as per SEBI Buyback Regulations
Buyback offer letter or tender offer document (if applicable)
Register of members and shareholding pattern
Form SH-9 (Return of Buyback) filed with the Registrar of Companies within 30 days of completion
Form SH-11 (Declaration of extinguishment of shares)
Bank details and payment instructions for repurchase consideration
Any approvals from SEBI or stock exchanges (for listed companies)
Filing proof of public announcement and advertisements
Procedure – Buyback of Shares
Verify that the company meets the conditions under Companies Act, 2013 and SEBI regulations (for listed companies).
Ensure buyback does not exceed 25% of paid-up capital and free reserves.
Board Meeting
Convene a Board Meeting to approve the buyback proposal, decide buyback amount, mode, and timeline.
Obtain Board approval for the buyback offer document or public announcement.
Shareholders’ Approval
If required by Articles of Association or law, call a General Meeting and pass a Special Resolution approving the buyback.
Declaration of Solvency
Directors must make a declaration of solvency stating the company’s ability to pay buyback amount (Form SH-8).
Public Announcement / Offer Document
For listed companies, make a public announcement or release offer document as per SEBI Buyback Regulations.
Open the Buyback
Implement the buyback via the approved route (tender offer, open market purchase, or book building).
Payment to Shareholders
Pay the buyback consideration to shareholders whose shares are accepted.
Extinguishment of Shares
Cancel the bought-back shares and reduce the share capital accordingly.
File Returns with Registrar of Companies (RoC)
File Form SH-9 (Return of Buyback) within 30 days of completion.
File Form SH-11 (Declaration of extinguishment of shares).
Comply with Post-Buyback Restrictions
No fresh issue of the same kind of shares for 6 months after buyback (with certain exceptions).
Maintain Records
Keep proper records of board and shareholders’ resolutions, buyback offer documents, payments, and filings.
Frequently Asked Questions
A company name search ensures that your chosen business name is unique, legally compliant, and not already registered with Companies House UK. It helps you avoid legal disputes, trademark issues, and confusion in the Cardiff business market.
If your desired name is already registered, you’ll need to choose a different name or modify it. Using a taken name could result in rejection by Companies House or potential legal issues. Our experts can help you brainstorm alternative names that are compliant and market-ready.
It’s not advisable to use a name that’s too similar to another company, especially within the same industry. Similar names can confuse customers and risk trademark disputes. A company name search helps you identify these risks early.
For a company name search in Cardiff, you may need:
Proposed company name
Business entity type (Ltd, LLP, Partnership, etc.)
Jurisdiction (Cardiff / UK)
Owner or shareholder details (if applicable)
Business description
A “high probability” result means your proposed company name is likely to be available, but further checks are recommended. This is why our detailed Cardiff Company Name Search Report includes both identical and similar names for clarity.
Certain words are restricted under UK law (e.g., “bank,” “insurance,” “government”). If you want to use them, you’ll need special approval from regulatory bodies. We guide you through this process if your Cardiff business requires such terms