Skip to content

CS Executive · Company Law and Practice · Members and Shareholders

Under the Explanation to Section 151 of the Companies Act, 2013, who is a 'small shareholder' unless a different sum is prescribed?

A small shareholder is one holding shares of nominal value of not more than twenty thousand rupees, or such other sum as may be prescribed. The test is based on nominal (face) value, not market value and not a percentage of paid-up capital.

  1. AA shareholder holding shares of nominal value of not more than twenty thousand rupeesCorrect
  2. BA shareholder holding shares of nominal value of not more than two lakh rupees
  3. CA shareholder holding shares of market value of not more than twenty thousand rupees
  4. DA shareholder holding not more than one per cent of the paid-up capital

Explanation

The Explanation defines a small shareholder as one holding shares of nominal value of not more than twenty thousand rupees, or such other sum as may be prescribed. The test uses nominal value, not market value, and not a percentage of capital.

Did you get it right without looking?

One question tells you little. A timed set on Members and Shareholders shows your real accuracy, how long you take and where you lose marks.

Practise Members and ShareholdersFree diagnostic mock

More Members and Shareholders questions