Shareholders dispute

846 views 2 replies

Hi,

I'm director and a minority shareholder (20%) in a newly formed Pvt Ltd company, with only 2 director. The other director wants to change the AoA or whatever document it takes, to implement a clause. The clause is that no shareholder can leave the company till 15 years. If anyone choses to leave before that period, he wudn't get ANYTHING from the company AND he cannot start a similar business within a couple of years of leaving the company. 

I have this impression that RoC has defined the exit rules, and restricts the way we want to add/modify exit rules. Personally I feel that the clause is not fair, and there should be some imposition by RoC that the shareholder will get SOME value from the company, in any form. 

Second, when the AoA is altered, do I have the right to be notified and to let it not be altered. 

Replies (2)
As far as i think pvt company impose restricton on transfr of shares..bt retaining it cant be imposed

Insertion of any such clause in the AOA is legally impermissible. Also even if AOA is to be altered, it can only take place by special resolution in the meeting of shareholders by virtue of section 31. Thus being a shareholder you will have to be informed of this.

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