Purchase of own shares by a company is called......
Answer & explanation
Correct answer: option 2
The correct answer is option 2- Buy back of shares.
Purchase of own shares by a company is called Buy back of shares.
When a company purchase its own shares, it is called ‘Buy-back of Shares’. Section 68 of The Companies Act, 2013 provides that the company can buy their own shares from either of the following sources :
(a) Existing equity shareholders on a proportionate basis
(b) Open Market
(c) Odd-lot shareholders
(d) Employees of the company