• Making dormant stakeholders participation in xompany

There are 5 shareholders of company in which 2 left at after 1 year of starting of company. They are now enjoying all the benefits without doing anything good for the company.

None of the are directors of company.
How can we get rid of such passive shareholders?
Asked 4 years ago in Business Law

First answer received in 30 minutes.

Lawyers are available now to answer your questions.

9 Answers

You can get valuation of shares done by company auditor 

 

2) offer to buy out minority shareholders 

 

3) Section 66 of the Companies Act, 2013 provides that the paid up capital of a company can be reduced by paying off the minority shareholders. The reduction in such capital is subject to a special resolution which has to be further confirmed by the National Company Law Tribunal (NCLT) of the concerned jurisdiction

Ajay Sethi
Advocate, Mumbai
94520 Answers
7485 Consultations

5.0 on 5.0

Kindly pass the resolution in extra AGM and make them silent or sleeping partners reduce their facilities as compared to active partners.

Ganesh Kadam
Advocate, Pune
12910 Answers
253 Consultations

4.9 on 5.0

For removing a share holder involuntarily you need to see that he has violated the share holder agreement or bye laws of the company

Prashant Nayak
Advocate, Mumbai
31802 Answers
175 Consultations

4.1 on 5.0

If you want to remove a shareholder, you first must decide if the shareholder is leaving the company voluntarily or involuntarily. For involuntary removals, the shareholder will usually need to have violated the shareholders agreement or company bylaws before they can be forced out of the company

Mohammed Mujeeb
Advocate, Hyderabad
19299 Answers
32 Consultations

4.7 on 5.0

1.  IT is not necessary that Share-Holders must be Directors /Employees of the company.  By virtue of being a shareholder, they are entitled to the profits (dividend) generated by the co. and nothing else.

2. Shareholders under companies act, CANNOT be just simply RID of their share holdings, unless they transfer or sell it to back to co. or somebody else.

Hemant Agarwal
Advocate, Mumbai
5612 Answers
25 Consultations

5.0 on 5.0

Dear Sir,

You may invoke clauses of Articles of Association and pass a resolution and remove them and accordingly

Inform to the registrar of companies .

Kishan Dutt Kalaskar
Advocate, Bangalore
6135 Answers
483 Consultations

4.8 on 5.0

Rein of comapny rest in management/directors and not in shareholders. You are majority holders, 3 pass any resolution or share bye back.

Yogendra Singh Rajawat
Advocate, Jaipur
22596 Answers
31 Consultations

4.4 on 5.0

Give them back the investment done by them in the business execute a retirement deed or agreement for purchasing of their share by company.

You have to make a mutual agreement with those partners or shareholder for giving up their share in the company.

Mohit Kapoor
Advocate, Rohtak
10687 Answers
7 Consultations

5.0 on 5.0

The shareholders have left the company, you mean to say that they have relinquished their rights or surrendered their shares?

The shareholders are not the employees or partners of the company.

Shareholders make a financial investment in the corporation, which entitles those with voting shares to elect the directors. Shareholders do not normally have any rights to be involved directly in company management. Their connection to company management is typically via the Board of Directors as described above.

the primary responsibility of shareholders is to run the business by electing a board of directors, who then hire the company's leaders.

shareholder is a person or an institution that owns shares in a company

T Kalaiselvan
Advocate, Vellore
84711 Answers
2172 Consultations

5.0 on 5.0

Ask a Lawyer

Get legal answers from lawyers in 1 hour. It's quick, easy, and anonymous!
  Ask a lawyer