Your question: When can the board of directors refuse transfer of shares?

WHEN CAN board of directors refuse transfer of shares?

The board of directors may refuse registering the transfer under following conditions: When the provisions for transfer of shares as given in the Articles of Association is not fulfilled by the member. When the instrument of transfer is not as per the rules prescribed under the Companies Act.

Can directors refuse to register a transfer of shares?

Refusal to register a transfer of shares

In certain circumstances, the directors of the company may refuse to register a transfer of certificated shares. … It is common for the articles of a private company limited by shares to give its directors the power to refuse to register a transfer of shares.

On what grounds can transfer of shares be rejected?

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.

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Can a public company refuse transfer of shares?

The member of a public company can transfers his shares voluntarily at any time as per the provisions specified by the Articles of the Association of the Company, if the company refuse to transfer shares than the member of the company may adopt the process specified under section 58 of the Companies act 2013.

Are shares of 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.

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.

What is the procedure for transfer of shares?

How to Transfer Shares of a Private Limited Company

  1. Step 1: Obtain share transfer deed in the prescribed format.
  2. Step 2: Execute the share transfer deed duly signed by the Transferor and Transferee.
  3. Step 3: Stamp the share transfer deed as per the Indian Stamp Act and Stamp Duty Notification in force in the State.

Do directors have to approve share transfers?

The power to refuse to register share transfers

transfers of shares by existing shareholders of a company are not effective until the transfer is registered by directors; and. directors may refuse to register transfers of shares in the company for any reason.

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Can share ownership be transferred?

Shares are like any other form of property, they can be transferred between individuals at any time. This can be done because of several reasons: The shareholder has died. They are trying to recoup investment.

What remedies are available to an aggrieved shareholders?

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:

Can registration of transfer of shares be refused by the company on any ground?

In this case the Supreme Court held that the registration of a share transfer may not only be refused on the ground of it resulting in a violation of any law but also for any other sufficient cause. … Refusal can be on the ground of violation of law or any other sufficient case.

What are the remedies available to a person aggrieved by refusal to register a transfer of shares?

The transferor or transferee may appeal to the Company Law Board (Tribunal) against any refusal of the company to register the transfer or to send notice of its refusal to register the same. … The company shall have to comply with such order within ten days of the receipt of the order.

Which company share can be freely transferable?

restricts the right to transfer its shares, if any; While public company is a company which is not a private company and moreover, the shares of a public company are freely transferable.

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Can shares be transferred in public company?

As per the provision of company law, the securities or other interest of any member of a public company shall be freely transferable. … In the case of a public company, the Act provides that the shares or debentures and any interest of the company are freely transferable.

Why would the registrar refuse to register a company?

The Registrar may refuse to register a company where: the Regulations are not in order (e.g. where there are breaches of the Companies Code); the objects are unlawful; the subscriber(s) is/are incompetent (on grounds of infancy or unsound mind);

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