Comment on the following: Compulsory acquisition of shares of minority shareholders of unlisted companies.
CS Professional · Corporate Restructuring, Valuation and Insolvency · PYQS · December 2015
Comment on the following: Compulsory acquisition of shares of minority shareholders of unlisted companies.
Answer & Explanation:
Section 395 of the Companies Act contains a compulsory acquisition mode for the transferee company to acquire the shares of minority shareholders of Transferor Company. Where the scheme has been approved by the holders of not less than nine tenth (90%) in value of the shares of the transferor company whose transfer is involved, the transferee company, may, give notice to any dissenting shareholders that transferee company desires to acquire their shares. The scheme shall be binding on all the shareholders of the transferor company (including dissenting shareholders), unless the Court Orders otherwise (i.e. that the scheme shall not be binding on all shareholders).
Topics: Corporate Restructuring
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