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asset tranfer by Pvt company to shareholder in lieu of share

CA Shubham (Business) (28 Points)

08 February 2011

I have a private limited company in which i and my borther is director having equal number of shares. I need to quit the company, so i need to transfer my shares to company/other director in lieu of 50% assets which the comapny is holding, as the company/other director is not having cash to settle my shares.

Please guide me such that i can get 50% of company assets.

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2 Replies

Sudhir Garg (Service) (236 Points)
Replied 09 February 2011

Dear CA Shubam

Being shareholder, you do not have the right over the assets of the company except in winding up. Transfer of shares between two does not make company liable to sell its assets to transferor. i dont see any instance by which you can get the 50% assets of the company until and unless company becomes the party of any sort of agreement between you and transferee. You may however enter into tripartite agreement among transferor, transferee and company whereby company will transfer its assets in lieu of your transfer of shares to the transferee. Company Books of Accounts will then show Transferee as debtors for the value of assets transferred in your name.

Views of other members solicited.

Regards- Sudhir