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Section 235 and 236

The document outlines the processes under Sections 235 and 236 regarding the acquisition of shares from dissenting shareholders when a majority has approved a scheme. Section 235 allows for a voluntary acquisition by the transferee company, while Section 236 mandates the acquirer to notify and purchase remaining shares from minority shareholders. Special considerations include the handling of funds and provisions for negotiations on share prices among minority shareholders.

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39 views2 pages

Section 235 and 236

The document outlines the processes under Sections 235 and 236 regarding the acquisition of shares from dissenting shareholders when a majority has approved a scheme. Section 235 allows for a voluntary acquisition by the transferee company, while Section 236 mandates the acquirer to notify and purchase remaining shares from minority shareholders. Special considerations include the handling of funds and provisions for negotiations on share prices among minority shareholders.

Uploaded by

anoushkasen380
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© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Kavya Lalchandani

Grounds Section 235 Section 236


Applicability Deals with acquisition of dissenting shareholders when 90% of the class Acquirer along with the PAC have become holders of the 90% of the shares
has approve the scheme or the plan of arrangement therefore, therefore applicable to minority shareholders.
Timeline • The 90% should assent to the scheme within four months of making • Open a separate bank account and deposit the required amount for
the offer, and within two months of attaining the assent may give payment at least for one year of payment and amount shall be disbursed
notice that it desires to purchase the shares of the dissenting as well. within 60 days to minority shareholders.
• Notice by dissenting shareholder or not – one month (please refer to • Special rule for someone who fails to receive within 60 days
the process)
• Special rules for someone who had died or ceased to exist…
Nature Not mandatory: the transferee company may, at any time within two Mandatory: such acquirer, person or group of persons, as the case may be,
months after the expiry of the said four months, give notice in shall notify the company of their intention to buy the remaining equity
the prescribed manner to any dissenting shareholder that it desires to shares.
acquire his shares.

Process • Once the notice is given, and there is no objection by the dissenting • Majority to offer the minority according to price determines by the
shareholders, the transferee company becomes bound to acquire the registered valuer as per the rules
shares at the terms that assenting shareholders have agreed to transfer
• Then open a separate bank account….
their shareholding. Has to be done within one month.
• Company whose shares are being transferred shall act as a transfer agent
• Even if an application is made and the Tribunal has not made any
order in favour of the dissenting shareholders or the application is
pending and then is subsequently disposed off – carry out the transfer
within one month.
Special Funds received by the transferor company to be kept in a separate bank • Where shares of minority have been acquired as per this section and
considerations account and to be held in trust for the persons entitled to such shares. prior to the date of transfer, 75% or more of the minority (majority
amongst the minority) may negotiate for a higher price and if such
negotiation nis successful, the additional compensation received would
be distributed on a pro rate basis to all minority.
• minority shareholders of the company may offer to the majority
shareholders to purchase the minority equity
Kavya Lalchandani

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