Skip to main content

Daily Email Newsletter (Sign-up Free)

Sec 70 Companies Act 2013: Prohibition for Buy-back in Certain Circumstances

SECTION-70 (Prohibition for buy-back in certain circumstances) under CHAPTER-IV (Share Capital and Debentures) of the Companies Act, 2013

(1) No company shall directly or indirectly purchase its own shares or other specified securities—
(a) through any subsidiary company including its own subsidiary companies; 
(b) through any investment company or group of investment companies; or 
(c) if a default, is made by the company, in the repayment of deposits accepted either before or after the commencement of this Act, interest payment thereon, redemption of debentures or preference shares or payment of dividend to any shareholder, or repayment of any term loan or interest payable thereon to any financial institution or banking company: 
Provided that the buy-back is not prohibited, if the default is remedied and a period of three years has lapsed after such default ceased to subsist.
(2) No company shall, directly or indirectly, purchase its own shares or other specified securities in case such company has not complied with the provisions of sections 92, 123, 127 and section 129.

Extra Notes for Readers

(1) The Companies Act, 2013 received the assent of the President on the 29th August, 2013 (Published in the Gazette of India, Extraordinary, Part II - Section 1 by Ministry of Law and Justice, Legislative Department on 30th August, 2013).

(2) Section 70 [except sub-section (2)] of the Companies Act 2013 was notified by MCA Notification S.O. 2754(E) dated 12th September 2013 (w.e.f. 12th September 2013).

(3) Sub-section (2) of Section 70 of the Companies Act 2013 was notified by MCA Notification S.O. 902(E) dated 26th March 2014 (w.e.f. 1st April 2014).

(4) Further, in relation to clause (b) and (c) of sub-section (1) - refer the following rule(s) of the Companies (Share Capital and Debentures) Rules, 2014.

This page was last updated on 9th February, 2017.