New rules for takeover of Unlisted Companies

On 3 February 2020, the Ministry of Corporate Affairs ("MCA") notified sections of the Companies Act 2013 (the Act) in relation to takeover of unlisted companies. With the notification of sub-section 11 & 12 of section 230 of the Act, any shareholder holding more than 75% or 3/4th of the total shareholding of the company. may make an application to the National Company Law Tribunal to acquire the remaining shareholding of the Company. However, this section would not be applicable for the transactions executed by way of execution of share purchase agreement etc. where the consent of buyer and sellers of the shares are obtained.

With the above notification, MCA has also amended National Company Law Tribunal Rules, 2016 and Companies (Compromises, Arrangements and Amalgamations) Rules, 2016 to lay down a complete provision for the takeover by the shareholders holding 75% of shares in the Company. The aforementioned section also provides procedure to seek remedy by the aggrieved shareholders i.e. minority affected by such takeover.

Source:

http://www.mca.gov.in/Ministry/pdf/Notification_04022020.pdf

http://www.mca.gov.in/Ministry/pdf/Rules3_04022020.pdf

http://www.mca.gov.in/Ministry/pdf/Rules1_04022020.pdf

 

Similar Articles

Sometimes talking gives solution

Contact us for more information about our services and how we can help

Contact
Disclaimer

As per the rules of the Bar Council of India, we are not permitted to advertise or solicit work. By accessing and browsing through this website, all users agree and acknowledge that the content of this website is for informational purposes only and that there has been no form of solicitation, advertisement or inducement by NovoJuris Legal or its members, in any form. No information provided on this website should be construed as legal advice and NovoJuris Legal shall not be liable for consequences of any action taken by relying on the information provided on this website.