Section 265 of the Companies Act, 2013
Section 265 of the Companies Act, 2013 deals with the Power of the Tribunal to make order for purchase of minority shares.
📜 Section 265 – Power of Tribunal to order purchase of minority shares
🔹 Key Provisions:
Application to Tribunal:
When a company has acquired shares or voting rights of not less than 90% of the total paid-up equity share capital from its shareholders, the company or any person aggrieved may apply to the National Company Law Tribunal (NCLT).
Tribunal's Power:
The NCLT may order the company to purchase the shares of minority shareholders who have not sold their shares voluntarily.
Fair Price:
The purchase must be made at a fair price determined by the Tribunal, considering the valuation of the company.
Protection of Minority Shareholders:
This section protects the interests of minority shareholders by giving them a legal remedy to compel the company to buy their shares at a fair value when the company is close to full ownership.
✅ Purpose:
To facilitate complete acquisition of ownership in the company by the majority shareholder(s), while safeguarding minority shareholders' rights through the intervention of the Tribunal.
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