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CS Executive · Capital Market and Securities Laws · Buy-Back of Securities

Zenith Polymers Ltd, a listed company, has passed a special resolution for a buy-back. Before it begins the buy-back, which filing must it make under the Companies Act, 2013?

Before buying back, a listed company must file a declaration of solvency with both the Registrar and SEBI. It must be signed by at least two directors, one of them the managing director if there is one, and verified by an affidavit on the directors' inquiry into the company's affairs.

  1. AA declaration of solvency signed by at least two directors, filed with the Registrar and SEBICorrect
  2. BA declaration of solvency signed by all directors, filed only with the Registrar
  3. CA return of buy-back filed with the Registrar within seven days
  4. DA declaration of solvency signed by one director and the company secretary, filed with SEBI only

Explanation

Section 68(6) requires a declaration of solvency signed by at least two directors (one being the managing director, if any), verified by affidavit, filed with the Registrar and SEBI before the buy-back. The option limiting filing to the Registrar is wrong because a listed company must also file with SEBI. The return is filed after completion, not before.

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