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CS Executive · Company Law and Practice · Members and Shareholders

Under the Companies Act, 2013, Gupta Ltd. gave notice to dissenting shareholder Imran under the nine-tenths approval provisions to acquire his shares. Imran wants the Tribunal to order otherwise. Within what time must he apply, and what is the default position if he does not?

The dissenting shareholder must apply to the Tribunal within one month from the date of the notice. Otherwise the transferee company is entitled and bound to acquire the shares on the same terms on which approving shareholders' shares are transferred.

  1. AWithin one month from the date of notice; otherwise the transferee company is entitled and bound to acquire the shares on the terms offered to approving shareholdersCorrect
  2. BWithin four months from the notice; otherwise the shares lapse
  3. CWithin sixty days from the notice; otherwise the transferee company may fix its own price
  4. DAt any time before registration; the transferee company is then only entitled but not bound

Explanation

After notice, the transferee company is entitled and bound to acquire the shares on the scheme terms, unless the dissenting shareholder applies to the Tribunal within one month of the notice and the Tribunal orders otherwise. Sixty days relates to disbursal of sums to shareholders, so option C confuses periods.

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