(5) The directors may refuse to register the transfer of a share, and if they do so, the instrument of transfer must be returned to the transferee with the notice of refusal unless they suspect that the proposed transfer may be fraudulent.
Can directors refuse to transfer shares?
The directors can refuse to register a transfer. If they do so, they must return the stock transfer form with a notice giving their reasons for refusing it (unless the directors suspect that the proposed transfer is fraudulent).
Can a company refuse to register a transfer of shares?
Infact, it is provided that if a company refuses to register transfer of shares without sufficient cause, within two months from the date on which the instrument of transfer or the intimation of transfer is delivered to the company, the transferee can appeal to the Company Law Board.
Do directors have to approve a share transfer?
5 The board of directors decide whether to approve the transfer. In most cases approval of the transfer by the company is a formality, confirmed via a board resolution unless an officer of the company has previously been authorised to accept share transfers.
What extent may a company refuse registration of transfer?
In case due call money has not been paid by the transferor. When the transferor is a debtor of the company, and the company has a lien on such shares. If instrument is incomplete, irregular and defective, and not properly stamped. On other reasons, just and equitable and are in the general interests of the company.
What is the procedure of share transfer?
How to Transfer Shares of a Private Limited Company
- Step 1: Obtain share transfer deed in the prescribed format.
- Step 2: Execute the share transfer deed duly signed by the Transferor and Transferee.
- Step 3: Stamp the share transfer deed as per the Indian Stamp Act and Stamp Duty Notification in force in the State.
Can share ownership be transferred?
Shares or debentures are movable property. They are transferable in the manner provided by the articles of the company, especially, the shares of any member of a public company. The transfer of securities is possible through any contract or arrangement between two or more persons.
What are the restrictions on transfer of shares?
Restriction on transfer
Section 2(68) of the Companies Act 2013 provides that the Articles of a private company shall restrict the right to transfer the company’s shares. This restriction is binding upon the company and members thereof.
What do you mean by transfer of share?
Transfer of shares refers to the intentional transfer of title of the shares between the transferor (one who transfers) and the transferee (one who receives). The shares of a public company are freely transferable unless the company has a valid reason to disallow the same.
Are shares of a private company freely transferable?
According to the Companies Act, the right to transfer shares is restricted by its articles. Only a public limited company has the right to transfer shares freely. Thus, shares of Private Limited company are not freely transferable.
Can directors remove shareholders?
The shareholder’s agreement must describe the process of involuntary removal. Otherwise, a company cannot force out a shareholder until they have violated the Company statute. Once the resolution is passed the Company Secretary and Board of directors should sign the removal resolution.
At what point are shares transferred?
The transfer of the legal title to shares does not take place until the transferee, having agreed to become a shareholder, has their name entered into the company’s register of members, at which point the transferee takes legal ownership of those shares.
What are the remedies available to a person aggrieved by refusal to register a transfer of shares?
If a public company without sufficient cause refuses to register the transfer of securities within a period of thirty days from the date on which the instrument of transfer or the intimation of transmission, is delivered to the company, the transferee may, within a period of sixty days of such refusal or where no …
What remedies are available to an aggrieved shareholder?
a. Remedies Against the Company
- Rescission of the Contract. The person who purchased shares on the basis of the prospectus containing misstatements can rescind the contract (cancel the contract). …
- Damages for Fraud. …
- Damages for Misstatement. …
- Damages for Non-disclosure of Material Facts:
What is Section 241 of the Companies Act 2013?
Section 241 (1) of the 2013 version of the Act states that any member of a company who complains that the affairs of the company have been or are being conducted in a manner prejudicial (damaging) to the interests of the company, its members or the public at large may apply to the Tribunal for an order under this …