Company Accounts

Share Capital

Medium

A company can buy its own shares when-

The debt - Equity ratio is not more than 1:1 after the buy back.

The amount of buy back shares in any financial year not exceeding 20% of the paid-up capital and free reserves.

Partly paid up shares are considered buy back.

Article of Association must authorise and special resolution has been passed for the buy back of shares.

✅ Correct Option: 4

As per Section 68 of the Companies Act, 2013: debt-equity ratio after buy back should not exceed 2:1 (not 1:1); buy-back in a financial year cannot exceed 25% of paid-up capital and free reserves (not 20%); only fully paid-up shares can be bought back. Articles of Association must authorise and a special resolution is required, making option 4 correct.

2026: 24 May Shift 1

Where there is no articles of association of its own, select the correct provision of Table A of Companies Act.

2025: 15 May Shift 2

Match List-I with List-II

List-I	List-II
(A) Calls in Advance A/c Dr. To Particular Call A/c	(I) For Interest due on Calls in Advance
(B) Interest on Calls in Advance A/c Dr. To Sundry Shareholder's A/c	(II) For Interest Paid on Calls in Advance
(C) Sundry Shareholder's A/c Dr. To Bank A/c	(III) Calls in advance adjusted with the call money due
(D) Bank A/c Dr. To Calls in Arrears A/c To Interest on Calls in Arrears A/c	(IV) Calls in arrears received with interest

Choose the correct answer from the options given below:

2026: 19 May Shift 1

Which of the following is not a feature of a private company ?

2026: 29 May Shift 2

Money received in advance from shareholders before it is actually called-up by the directors is :

2025: 31 May Shift 1

Arrange Categories of Share Capital into correct order-

(A) Subscribed Capital

(B) Authorised Capital

(D) Called up Capital

Choose the correct answer from the options given below:

2022: 20 July Shift 1

PQR Ltd. issued 40,000 Equity shares of Rs. 10 each at par payable Rs. 3 on application, Rs. 4 on allotment and balance on first and final call. Applications were received for 1,10,000 shares. Applications for 20,000 shares were refused and allotment was made prorata to remaining applicants. Amount received on allotment is :

A company can buy its own shares when-

Solution

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