REFUSAL
BY COMPANY TO REGISTER THE TRANSFER OF SHARES
When Company
has a right to refuse The circumstances, in which a company may refuse
to register the transfer of shares, are different, for company listed on stock
exchange and unlisted company. LISTED COMPANY Where
the instrument of transfer is not properly signed or stamped or not properly executed. Where
the transfer of security is in contravention of any law composition of Where
the Board of Director, may change, to such on extent, because of transfer, which
may affect interest of company. Where the transfer is prohibited
by any law.
UNLISTED COMPANIES
If partly
paid up shares are being transferred and the transferee is known to be financially
incapable of paying balance calls. If partly paid up shares are
being transferred to a minor incapable of entering into a contract. In
case due call money has not been paid by the transferor. When the
transferor is a debtor of the company, and the company has a lien on such shares. If
instrument is incomplete, irregular and defective, and not properly stamped. On
other reasons, just and equitable and are in the general interests of the company.
ACTION
BY MEMBERS
Obligation of company to intimate
WHERE REFUSAL
TO REGISTER IS DUE TO TECHNICAL DEFECTS In cases of technical defects,
like improperly stamped, not duly executed etc, the Board of Director, have to
intimate the transferee, within two months from the date of lodging the transfer
deed in the prescribed form about the requirements of law which has to be completed
or complied with for securing registration. Where the transfer deed is time-banned,
say it has not been delivered to the company within a period of 12 months from
the date of endorsement by the prescribed authority, the instrument of transfer
is to be revalidated. For revalidating the instrument on application is
to be made in form no. 7 C to the Registrar of Companies, alongwith instrument
of transfer, and prescribed fees.
WHERE REFUSAL IS DUE TO OTHER REASONS
- Other reasons means
- Transfer of security is in contravention
of any law, or
- Likely change in composition of Board of Directors which might
be prejudicial to the interest of company In such cases, the company
is under a legal obligation to make a reference to the company Law Board and forward
copies of such reference to both the transferor and transferee. The
transferor and transferee would be given an opportunity of making representation,
if any, in writing, where after the Company Law Board would direct that the shares
be either registered or not registered by the company. Where the
order directs registration of transfer, the company is found to give effect to
the registration within 10 days of the receipt of order of the Company Law Board. On
the other hand, where the company Law Board has directed that the transfer of
shares need not be registered, the company is obliged to intimate the transferor
and transferee within 10 days of such direction.
|
