Re:Qualification Shares

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This query is : Resolved

Pramod Kumar (Querist)

10 June 2010

Dear Sir,

I put following points for your kind consideration and reply:

1. Whether it is necessary to hold qualification shares by a Director in a company under The Companies Act 1956? If not,

2. whether Articles can be amended to delete such provision, If it is provided by Articles to hold such qualification shares by a Director?

The issue is urgent and I soloicit your kind guidance at the earliest,

with Regards,

PRAMOD KUMAR

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)

10 June 2010 1. There is no statutory requirement that a Director must hold any shares at all.
2. In view of the above, the AOA can be altered.
For further details pl refer section 266 and 270 to the Companies Act,1956.

Ankur Garg

Ankur Garg (Expert)

10 June 2010 Agree with Sir.

Dear Sir,

Provisions related to qualification shares are governed by section 270 of the companies act, 1956. A director of public company is also not required to hold qualification share unless required by articles u/s 270.

Further Section 270 and 272 does not apply to Private Company by virtue of Section 273 of the Act. However, the Articles of a Private Company may provide that the directors are required to obtain shares as qualification shares.

If your articles contain the requirement to hold qualification shares then by passing special resolution in the general meeting you can amend your articles and remove that clause from article.

Within 30 days of passing special resolution file form 23 with ROC.

Regards

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