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Procedure when shareholder of the company is untraceable
Ours is a listed Company. There are some shareholders that are untraceable. The Company has taken a lot of efforts for finding them, but has failed. What can be done with the shares that lie with these shareholders..??
Replies (2)
The Ministry of Corporate Affairs clarified that Article for expulsion of Member is opposed to the fundamental principles of the Company and is Ultra vires the Company, the reason being that such a provision militates against the Provisions of Companies Act relating to the rights of member in a Company.
The Department of Company affairs has clarified that any assumption of the powers by the Board of Directors to expel a member by Altertion of Articles shall be illegal & Void.
The Companies Act,2013 is unfortunately silent about the procedure to be followed for the transfer of shares of a shareholder,who is not traceable.
Therefore, approval of NCLT will be necessary to make such transfer.
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