Company share purchase and financial assistance restrictions limit buybacks and loans, with narrow employee and banking exceptions. Companies cannot buy their own shares unless consequent reduction of share capital is effected under the Act, and public companies must not provide financial assistance-by loan, guarantee, security or otherwise-for purchase or subscription of their own or their holding company's shares. Exceptions include ordinary banking lending, company schemes for employee share purchases approved by special resolution and prescribed requirements, and loans to employees (excluding directors and key managerial personnel) up to six months' salary for purchasing fully paid shares; redemption of preference shares is unaffected and statutory fines and officer penalties apply.
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Provisions expressly mentioned in the judgment/order text.
Company share purchase and financial assistance restrictions limit buybacks and loans, with narrow employee and banking exceptions.
Companies cannot buy their own shares unless consequent reduction of share capital is effected under the Act, and public companies must not provide financial assistance-by loan, guarantee, security or otherwise-for purchase or subscription of their own or their holding company's shares. Exceptions include ordinary banking lending, company schemes for employee share purchases approved by special resolution and prescribed requirements, and loans to employees (excluding directors and key managerial personnel) up to six months' salary for purchasing fully paid shares; redemption of preference shares is unaffected and statutory fines and officer penalties apply.
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