Reject buy back offer

Pvt ltd 1799 views 4 replies

Krishna

25 Points Joined January 2012

Hi,

A minor share holder reject a buy -back offer?

Can company can pass resolution that it can buy-back from a particular share -holder. even if the share holder not willing to sell at that time.

Regards

Reddy

Replies (4)

Ajinkya Kurdukar

Lawyer

44 Points Joined January 2012

Hi Krishan,

The company will have to make an offer of Buy back to the general shareholders and it cannot do so with one shareholder in perticular. If the share holder wants to exercise this option then he must do so at the time as provided by the resolution for buy back. The Buy back upto 10% can be resolved in the Board meeting and for a Buy Back upto 25% should be resolved in the general meeting.

Also, the Company cannot pass a resolution to the effect that it will offer the buy back only to one shareholder.

Krishna

25 Points Joined January 2012

Hi Ajinkya,

Thanks for response. Did share holder has right to reject that buy-back offer.

Regards

Krishna

Pankaj Arora

Learner

3134 Points Joined September 2009

Yes shareholder have right to accept or reject the buyback offer.

Ajinkya Kurdukar

Lawyer

44 Points Joined January 2012

Hi Krishnan,

Yes, the shareholder always has the right to reject the buy back offer. See technically, the buy-back is an 'OFFER' by its mere nature. Hence as per the the basic principles of The Contract Act, an offer needs to be accepted for it to be binding. If the shareholder does not want the buy back, he can very well reject the said offer.