Arrange the following in the context of "Buy Back of Shares".

(A) Articles of Association must authorise Buy Back of share

(B) Buy Back should be completed within 12 months

(C) Maintaining debt equity ratio of not more than 2:1 after Buy Back

(D) Passing Special Resolution in annual general meeting

(E) Filing solvency declaration with registrar and SEBI

Choose the correct answer from the options given below:

The correct option is A, D, C, B, E.

Let us understand the step-by-step logical sequence of events and legal conditions required for the "Buy Back of Shares" under Section 68 of the Companies Act, 2013, which justifies this order:

Step 1: Enabling Provision (Authorization)
Before a company can initiate any buy-back process, it must have the necessary enabling power. Therefore, the Articles of Association (AOA) of the company must first authorize the buy-back of shares. If not authorized, the AOA must be amended first. This makes (A) the logical starting point.

Step 2: Approvals (Resolution)
Once authorized by the Articles, the next step is to obtain the approval of the shareholders. This is done by passing a Special Resolution in the General Meeting (unless the buy-back is 10% or less of the total paid-up equity capital and free reserves, which can be authorized by a Board resolution). Thus, passing a Special Resolution in the general meeting is the next essential step, represented by (D).

Step 3: Post-Approval Financial Covenant (Debt-Equity Ratio)
For the resolution to be valid and executable, the company must satisfy the financial covenants. Specifically, the ratio of the aggregate of secured and unsecured debts owed by the company after the buy-back must not be more than twice the paid-up capital and its free reserves (i.e., a debt-equity ratio of not more than 2:1). This condition is represented by (C).

Step 4: Time Limit for Completion
Every buy-back must be completed within a strict statutory timeframe. According to the regulations, every buy-back must be completed within a period of 12 months from the date of passing the special resolution (or board resolution, as the case may be). This time condition is represented by (B).

Step 5: Filing Declarations and Procedural Closure
Before making the buy-back, the company must file a letter of offer along with a declaration of solvency (in the prescribed form) with the Registrar of Companies and the Securities and Exchange Board of India (SEBI) to ensure that the company will not be rendered insolvent within a period of one year of the buy-back. This regulatory filing serves as a final step in executing the process, represented by (E).

By putting these steps together in their logical and legal chronological sequence, we get the order: (A) → (D) → (C) → (B) → (E).