ATC Limited, a listed company bought back its shares to the extent of 5% of its paid up capital in January, 2018. In May, 2018 the company wants to make a further issue of shares by way of bonus issue.

ATC Ltd. can go ahead with the further issue of shares. As per section 68(8) of the Companies Act, 2013: When a company completes a buy-back of its shares or other specified securities it shall not make a further issue of the same kind of shares or other securities including allotment of new shares under clause (a) of sub section (1) of section 62 or other specified securities within a period of six months except by way of a bonus issue or in the discharge of subsisting obligations such as conversion of warrants, stock option schemes, sweat equity or conversion of Preference shares or debentures into equity shares. Since the company is making a further issue of shares by way of bonus shares it is exempt from the provisions of section 68(8) and hence authorized to issue bonus shares.