Dear All,
Query...
1. Can a private limited company allot shares in lieu of services? And if alloted can they forfeit shares if the service obligations are not fulfilled?
2. A euity shareholder holding 5-10% shares in a private limited company. Andwe demerge the company. Can this shareholder object for the demerger?
Regards
Aman Thukral
Dear Aman Thukral,
Please make a reference to section 79Aof the Companies Act which authorise the issue of sweat equity shares in consideration of the value addition ! Supply of technical know how etc
Usually the terms and conditions relating to forfeiture of shares are contained in the Articles. It is done usually when calls are in arrears.
Demerger will attract provisions of Section 391/394 of Companies Act (assuming substantial part of company is being parted in demerger). The said resolution under 391/394 must be supported by shareholders satisfying following criteria: must be supported by shareholders satisfying following criteria:
A. Shareholders in Majority in Number, PRESENT AND VOTING.
B. 3/4th in value of shares, PRESENT AND VOTING.
Therefore, you can go ahead with scheme of Demerger. However High Court may require company to arrange interest of dissenting shareholders (in your case 5-10% shareholders..) Their rights/interest may be secured by way of purchase of shares at the price mentioned in the scheme/ making scheme (which is accepted by majority shareholders) biding on them.
CAclubindia
