Right of a shareholder holding 50% holding in a pvt ltd co

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Bharat Agarwal (Querist)
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09 May 2015 I alongwith my relative hold 50% each shareholding in a small private limited company dealing mainly in Real Estate.Its Registered Office situated at the premises owned by my relative.I work for a corporate house and did not join Borad as Director or signatory in Bank etc.The relative and his wife were two Directors.The business was smooth for a long time with myself as a sleeping investor and of support from outside.

The company has reasonable stock of Assets in form of some Land and Flats,shoaps apart from inter corporate investments.Also deal in shares and hold shares.

Relations soared and I am now not allowed any access to company, its records, accounts, business & transaction details.The Directors have been replaced by their own Friends without change in shareholdings.Practically my entity has been reduced to zero level.As I am not allowed access to office my personal papers and own shre certificates are also left there and I do not possess my own share certificates.The Return filed with ROC for 31-03-2014 however confirm my holding as earlier.

I am loosing my shares, investments,rights,and the share in assests of the company. What to do?

CS Arvind meena

CS Arvind meena (Expert)
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09 May 2015 First you should try to short out all matters by mutual cooperation. Share certificate is a conclusive evidence of shareholding. They can't transfer your shares without a transfer deed signed by you. if you are not a shareholder as per recently filed annual return then you have to move to Company Law board.

Bharat Agarwal

Bharat Agarwal (Querist)
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10 May 2015 Sir
all the efforts for amicable resolutions have failed as the opposite has developed negativity in mind.Kindly advise about formal steps.

Asha Kanta Sharma

Asha Kanta Sharma (Expert)
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22 July 2025 Thank you for your detailed query. You're in a serious shareholder dispute situation, and legal action may be the only way forward now.

Here is a structured legal and practical guide to help you safeguard your rights as a 50% shareholder in a Private Limited Company, especially when you're being excluded from the affairs of the company:

🧾 Background Summary:
You and your relative each hold 50% shares in a Pvt. Ltd. company.

You were a passive investor (not a director, not a signatory).

Registered office is on your relative’s premises.

They’ve replaced the directors (now friends/associates) without changing the shareholding.

You're being denied access to records, your share certificates, and overall company information.

ROC filings confirm your 50% shareholding as on 31.03.2014.

✅ What You Should Do Now (Step-by-Step):
Step 1: Get Updated ROC Documents
Download the latest filings from the MCA portal (www.mca.gov.in).

Check the:

Latest MGT-7 (Annual Return) to confirm your shareholding still stands.

DIR-12 forms to track change of directors.

Financials (AOC-4) to review company assets and performance.

➡️ This is critical evidence showing you are still legally a shareholder.

Step 2: Send a Formal Legal Notice
Through a company law lawyer, send a legal notice to the company and its directors demanding:

Access to company records, accounts, and documents.

Return of your share certificates and personal belongings.

Clarification on business decisions and changes in management.

➡️ This sets the stage for legal proceedings and creates a formal record of your grievance.

Step 3: File Complaint Under Companies Act, 2013
You can file a petition with the National Company Law Tribunal (NCLT) under:

⚖️ Section 241 & 242: Oppression and Mismanagement
You can seek relief if:

Your rights as a shareholder are being suppressed.

Company affairs are being conducted in a prejudicial or oppressive manner.

There is misuse of company assets or removal of directors to block your participation.

📌 Reliefs NCLT can grant:

Reinstatement of fair board structure.

Audit and inspection of accounts.

Return of your share certificates.

Even winding up, if relations are irretrievably broken and company can't function in its current state.

Step 4: Request Inspection of Company Records
Under Section 171 of the Companies Act, 2013, a shareholder can request to inspect company records, minutes, and financials.

If denied, report to Registrar of Companies (ROC) and attach your request with a complaint.

Step 5: Report to ROC or File RTI with MCA
If NCLT seems like a big step initially, file a complaint with the ROC or submit a query on the MCA grievance portal to investigate management irregularities.

⚠️ Important Legal Points:
Share certificates are important, but MCA filings (MGT-7) are primary proof of ownership.

No one can legally transfer your shares without a signed share transfer deed from you.

Any decision or board meeting without notifying a 50% shareholder can be challenged as invalid.

You can ask for valuation and buyout under NCLT if continuing jointly becomes impossible.

🛡️ Suggested Immediate Actions:
Engage a company law lawyer (experienced with NCLT).

Send legal notice demanding access and share documents.

File NCLT petition under Sections 241/242 for oppression/mismanagement.

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