Regarding shareholding

This query is : Resolved

Guest

Guest (Querist)

10 October 2014 Respected Sir,
i along with three persons decided to invest in a private limited company. it was decided that all will invest an amount and obtain 76% shares in the company. but i have only invested the whole amount in the company. and the other persons are also claiming shares in the company. they also misutilized the investment made by me in the company. they purchased raw material and sold the finished goods in cash. and now letting me to appoint any CA and also no allowing me to start the company. i wud like to know are the also the shareholder of the company????? the three people have not even invested a single penny in the company

Ankur Garg

Ankur Garg (Expert)
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11 October 2014 So you have invested in the existing company. Just tell me have you received any share certificate after allotment of shares?

Was there any formal allotment of shares to you through board resolution. I would suggest you to take professional help and do online inspection of company on MCA site. Download and study form 2 for allotment of shares and form 20B for annual return.

Thanks

Guest

Guest (Querist)

11 October 2014 no i havent got the share certificate. not the other three people got share certificate. so the are not allowing to do any further work in company.
checked with mca but no share holdings there also

Asha Kanta Sharma

Asha Kanta Sharma (Expert)
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20 July 2025 Thanks for sharing the details. Here's a breakdown of your situation and some suggestions:

Your Situation:
You invested the entire amount to acquire 76% shares in a private limited company.
The other three persons are claiming shares without investing.
None of you have received share certificates.
The MCA records show no shares allotted to anyone (including you).
They are not allowing you to appoint a CA or start company-related work.
They misused your investment (purchasing raw materials and selling goods for cash).
Important points:
Shareholding is not just about investment but formal allotment
Legally, shareholders are those whose names appear in the company's Register of Members and who hold share certificates.
If no share certificates were issued and no allotment filed with MCA, then legally, no shares have been allotted to anyone, including you.
If shares are not allotted, there is no shareholding
This means the three persons claiming shares are not shareholders as they have no investment or allotment proof.
You also are not a shareholder unless shares are formally allotted in your name.
Misuse of your funds and cash sales
This raises serious corporate governance and possible fraud concerns.
You have a right to access company records and accounts.
Next steps to protect your interest:
Get professional legal and company secretary help immediately.
Inspect the company’s Register of Members, Board Resolutions, and financial books (available for inspection at the company registered office).
Check MCA filings (Annual Returns, Share Allotments) online using company CIN or name.
If the other persons have misused your money, you may have grounds for legal action including recovery and injunctions.
Without formal allotment and share certificates, no ownership rights accrue.
You can also file a complaint with Registrar of Companies (ROC) for non-compliance.
Summary:
Issue Your Status Legal Implication
Share Certificates Not received by anyone No legal shareholding unless issued
MCA Records No shares allotted No formal shareholders recorded
Investment Only you invested No formal proof unless shares allotted
Claim by Others They claim shares w/o investment No legal basis without allotment
Access to Company Records Denied You can insist by law and take legal help
Misuse of funds Happened May be criminal/civil offense — act quickly
Advice:
Contact a corporate lawyer and a Company Secretary immediately.
Demand formal share allotment in your name or refund of investment.
Consider legal action if funds are misused.
You have right to inspect records under the Companies Act.
Don't delay — improper usage and denial of rights can weaken your position.

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