As per section 77A 1 of the companies act 1956 a company can buy back its own shares out of ........

Accountancy (Phase -I & II) Employee Stock Option and Buy back of Securities

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As per section 77A (1) of the companies act,1956, a company can buy back its own shares out of:

Reserves which are available for distribution as dividend

Securities premium accout

Proceeds of fress issue of shares or other specified securities

All of the above.

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Explanation:

Buying back of shares which is often taken as a defense against takeovers has been recently given legal recognition in India. Section 77A inserted by the Amendment Act, 1999 allows [subject to the provisions of section 77B (2)] a company to buy its own shares and other specified securities out of (1)Its free reserves (2)The securities premium account. (3) The proceeds of any shares or other specified securities. However no buy back shall be made out of the proceeds of an earlier issue of the same kind of shares or same kind of other specified securities.