In what circumstances can the directors decline a transfer of shares?

Clause 20(1) of Schedule -I:

The directors may decline to register any transfer of shares not being fully paid up shares, to a person of whom they do not approve, and may also decline lo register any transfer of shares on which the company has lien. The directors may suspend the registration of transfer during the fourteen days immediately preceding the ordinary general meetings in each year. The directors may decline to recognize any instrument of transfer or refuse to register such transfer, unless –

a) the instrument of transfer is accompanied by the certificate of share to which it relates; and 

b) Such evidence as the Directors may reasonably require showing the right of the transferor to make the transfer has been furnished.

c) Form 117 is duly filled up.

Read More

Differentiate between ordinary resolution, special resolution and extra ordinary resolution.

Ordinary Resolution:

This is passed by the majority vole of members present at a general meeting. Such a resolution is passed in the ordinary way and deals with ordinary business, such as passing of accounts, appointing directors, auditors, and declaration of dividends and so on.

Special resolution:

 
This is passed in a general meeting by the three-fourths majority of the members present in person or by proxy, provided notice for such meeting specifying the intention to propose the resolution is given at least twenty-one days before the date of the meeting. Special resolutions are required -

a) to change the name of the company with consent of the registrar;
b) to alter the memorandum;
c) to alter the articles etc.

Extra Ordinary resolution:

This is passed by such majority vote at a meeting of which 21 days notice has been given. The notice must specify the intention to propose the resolution as an extra-ordinary resolution [Section-87(i)]. Such resolution is necessary when a company is sought to be wound-up voluntarily on the ground of that it cannot continue its business on account of its liabilities and also for a number of other reasons.

Read More