Sale of shares as per companies act

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Shareholders in private limited companies can generally sell their shares to outsiders, provided it's permitted by the company's Articles of Association. The timeline for receiving payment is typically set out in the Share Purchase Agreement, often within a day or two. If payment isn't received within this agreed timeframe, the sale agreement may be cancelled, and the shares cannot be transferred.

Meenakshi Ramandasani

Meenakshi Ramandasani (Querist)

08 May 2023 Hi,

Can any shareholder of private limited sale his shares to outsider ??
If yes, then in how many days consideration should be received ??
If not received within prescribed time then what will be the consequences ??

What are the provisions of companies act, 2013 related thereto ?

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)

08 May 2023 Yes, shares can sold to outsider
Time limit is one or two days.
If payment not received within the time limit sale agreement will be cancelled and shares will not be transferred.

Meenakshi Ramandasani

Meenakshi Ramandasani (Querist)

08 May 2023 this time limit is mentioned anywhere ??

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)

08 May 2023 It's as per agreement for sale nowhere it's mentioned.

Jatin Bajaj

Jatin Bajaj (Expert)

25 May 2023 Before selling any shares to the outsider, please refer Company's Articles and if the shares are not transferred as per the timeliness mentioned in the Share Purchase Agreement, the deal shall stand cancelled and shares cannot be transferred.

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