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Home / Company Law & Secretarial Services / Buy-back of Shares
Last updated: 2 October 2026
A buy-back lets a company return surplus cash to shareholders by purchasing its own shares — or give a shareholder an exit. Our team checks the limits, prepares the approvals and offer documents, and completes the filings within the deadlines.
Sections 68 to 70 of the Companies Act, 2013 and the Share Capital Rules set strict conditions for an unlisted company buying back its own shares:
The tax treatment of buy-backs for shareholders changed in October 2024 and again from 1 April 2026. We work with your tax adviser so shareholders know the tax effect before they accept.
Based on the Companies Act, 2013 and the rules made under it. Last updated: 27 September 2026.
Board approval up to 10%; special resolution up to 25%
Maximum debt-equity ratio after the buy-back
Minimum gap between two buy-backs
Declaration of solvency by directors
To file SH-11 after completion
Bought-back shares are cancelled
Buy-back rules leave little room for error.
Free reserves or debt-equity worked out wrongly, making the buy-back invalid.
Articles do not authorise a buy-back and are not amended first.
Shareholders accept without understanding the tax effect.
Other ways to restructure capital.
Capitalising reserves.
Distributing profits.
Exit by transfer to another holder.
Enabling the buy-back.
Limits, ratio and funding checked.
Board or special resolution passed.
Letter of offer and declaration of solvency filed.
Shareholder acceptances received.
Consideration paid and shares extinguished.
SH-11 filed within 30 days.
Complete the records and respect the cooling-off rules.
Shares cancelled and certificates destroyed or demat debited.
SH-10 register and register of members updated.
No further issue of the same kind of shares for a set period, except permitted issues.
Shareholders report the transaction in their returns as advised.
Share your query and our team will reply during business hours.
Up to 25% of paid-up capital and free reserves, with board approval up to 10% and a special resolution above that.
Secured and unsecured debt must not exceed twice the paid-up capital and free reserves after the buy-back.
Not within one year of a previous buy-back offer.
SH-8 letter of offer, SH-9 declaration of solvency and SH-11 return of buy-back within 30 days of completion.
The rules changed in October 2024 and again from 1 April 2026; shareholders should confirm the current treatment with their tax adviser.
ACS – Director, Expertvuw Management Pvt Ltd
This work is handled by Expertvuw’s team, with filings made on the MCA portal. Certifications and audits required by law are issued by independent practising professionals engaged for your case.