Arrange the following in the context of "Buy Back of Shares".
A. Articles of Association must authorise Buy Back of share
B. Buy Back should be completed within 12 months
C. Maintaining debt equity ratio of not more than 2 : 1 after Buy Back
D. Passing Special Resolution in annual general meeting
E. Filing solvency declaration with registrar and SEBI
Choose the correct answer from the options given below:
Answer & explanation
Correct answer: option 1
The correct answer is Option (1) → A, D, C, B, E
Buy-back under Section 68 of the Companies Act, 2013 must first be allowed by the company’s own rules, then approved by the members, kept within the debt limit, finished in time and reported.
(A) Articles of Association must authorise Buy Back of share — first. Without this power in the Articles no buy-back can start.
(D) Passing Special Resolution in annual general meeting — second. The members approve the buy-back.
(C) Maintaining debt equity ratio of not more than 2 : 1 after Buy Back — third. The company must stay within this limit after buying back.
(B) Buy Back should be completed within 12 months — fourth. The 12 months run from the date of the special resolution.
(E) Filing solvency declaration with registrar and SEBI — last. The declaration, signed by at least two directors, is filed with the Registrar and SEBI.
NCERT (2026-27 edition):
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