Share buy-backs

The Companies (Amendment) Act, 1999, which has retrospective effect from 31 October 1998, provides for the buy-back by a company of its own shares. This article considers related issues like the type of funds and maximum sums that may be employed for buy-back, the maintenance of the debt/equity ratio and the modes of buy-back. The tax liability of the company and its shareholders in a buy-back situation is surveyed.