Section 235 of the Companies Act, 2013
Section 235 of the Companies Act, 2013 deals with Power to acquire shares of shareholders dissenting from scheme or contract approved by majority.
📜 Section 235 – Acquisition of Shares of Dissenting Shareholders
This section provides a mechanism for a company (or transferee company) to acquire the shares of dissenting shareholders when a majority of shareholders have agreed to a scheme or contract involving the transfer of shares.
🔹 Key Provisions:
Applicability:
When a scheme or contract for the transfer of shares in a company (called the transferor company) to another company (called the transferee company) is approved:
By holders of not less than 90% in value of the shares (excluding shares already held by the transferee company or its nominees),
The transferee company may acquire the remaining shares from dissenting shareholders.
Right to Acquire:
The transferee company can give notice to the dissenting shareholders that it desires to acquire their shares.
Dissenting Shareholders’ Obligation:
A dissenting shareholder must comply with the notice and transfer their shares to the transferee company.
Depositing Consideration:
The transferee company must deposit the consideration amount (money/compensation) in a separate bank account if the shareholder does not respond or comply, so that the amount is available to the shareholder when claimed.
Registrar’s Role:
After acquisition, the transferee company sends a copy of the notice and a declaration of transfer to the Registrar, who registers the transferee company as the holder of those shares.
✅ Purpose:
To provide a legal path for completing acquisitions or mergers even if a small minority of shareholders dissent, ensuring majority decisions are not hindered.
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