Minority Shares Acquisition (s.235)

Question 1

S.235 is applicable to which type of companies?

Answer 1

the said provision is applicable to all types of Companies.

Question 2

What are the conditions required, when making an offer to minority shareholders?

Answer 2

there is no requirement when making an offer under this section.

Question 3

How much share holding does the transferee company hold in transferor company in order to utilize section 235?

Answer 3

unlike section 230 there can be a transferee company with no stake in transferor company.

Question 4

what are the requirements for acquiring the shares of the transferor company initially?

Answer 4

the scheme should be approved by 9/10 (90%) of share holders in value of transferor company.

Question 5

By when should the shareholders of transferee company approve the offer of transferee company?

Answer 5

The offer should be approved by the 9/10th shareholder in value within 4 months from date which the offer has been made.

Question 6

By when should the offer be made to the dissenting share holders (1/10th shareholders)

Answer 6

the offer to acquire the shares of dissenting shareholders to be made within 2 months after the expiry of 4 months (4 months time given from the offer to acquire 9/10th of shareholders in value)

Question 7

what is the process of acquiring remaining 1/10th of shareholders of transferor company?

Answer 7

S.235(2) unless the minority shareholder made application to NCLT, the transferee company can make an offer.

Question 8

What is the process if the dissenting shareholders made application to NCLT, on not willing to sell the share?

Answer 8

the tribunal may reject or accept their claim.S.235(3)
but it has to respond within one month from the date offer (to acquire dissenting shareholders)

Question 9

can the acquirer make compulsory acquisition of dissenting shareholders under this provision?

Answer 9

No