**Purpose of a public company purchasing its own shares:**

A public company may have various reasons for purchasing its own shares. Some common purposes include:

1. Capital restructuring: The company may wish to reduce its capital base or consolidate its ownership structure by repurchasing shares from existing shareholders.

2. Return excess cash to shareholders: If the company has accumulated excess cash, it may use it to repurchase shares and return value to its shareholders.

3. Support share price: By purchasing its own shares, the company can increase demand in the market, which may help support and potentially increase the share price.

4. Employee stock options: The company may purchase shares to fulfill its obligations under employee stock option plans or other equity-based compensation schemes.

**Source of funds for share repurchase:**

A company can utilize various sources of funds to purchase its own shares. These sources may include:

1. Retained earnings: The company may use its accumulated profits or retained earnings to finance the share repurchase.

2. Surplus cash: If the company has excess cash on its balance sheet, it can utilize this cash to fund the share repurchase program.

3. Debt financing: A company can also raise funds by taking on debt, such as issuing bonds or obtaining loans, to finance the share repurchase.

4. Asset sales: The company may sell non-core assets or subsidiaries to generate funds for the share repurchase.

**Requirements under the Company Act:**

Before and after the share repurchase, a public company must comply with certain requirements under the Company Act. These requirements include:

1. Approval by the board of directors: The decision to repurchase shares must be approved by the board of directors, based on the authority granted to them under the company's articles of association.

2. Shareholder approval: In some jurisdictions, the company may be required to seek approval from its shareholders through a special resolution before proceeding with the share repurchase.

3. Compliance with capital maintenance rules: The company must ensure that the repurchase does not breach any capital maintenance rules, which typically prohibit a company from reducing its capital below a certain threshold.

4. Disclosure requirements: The company must comply with any disclosure requirements imposed by the regulatory authorities, such as reporting the share repurchase in its financial statements or making public announcements.

5. Prohibition on market manipulation: The company must ensure that the share repurchase does not manipulate the market or artificially inflate the share price, as this would be in violation of securities laws.

6. Reporting obligations: The company must comply with reporting obligations, such as filing necessary documents with the regulatory authorities and providing updates to the shareholders regarding the progress of the share repurchase.

By adhering to these requirements, a public company can ensure that its share repurchase program is conducted in a transparent and legally compliant manner.