Company Law : Rights for minority shareholders under Companies Act 2013, including filing petitions, preventing oppression, and safeguarding int...
Company Law : In this paper, the author would discuss the concept of oppression and mismanagement in an elaborate manner. Further, it would also...
Company Law : Meaning of Oppression And Mismanagement The word ‘Oppression’ is not defined under the Companies Act, 2013. Oppression is the ...
Corporate Law : Minority being the victim need to be protected – Prevention of Oppression and Mismanagement Introduction This article mainly...
Company Law : The concept and overview of ‘Oppression’ & ‘Mismanagement’ is defined u/s. 241 of Companies Act 2013, and can be r/w S...
Corporate Law : NCLAT clarifies that non-declaration of dividend and director changes cannot be considered acts of oppression and mismanagement in...
I personally feel that an application under section 397/398 of the Companies Act, 1956 is a serious thing exposing serious misunderstandings between majority and minority group in the Company. We see this groupism in private limited companies and closely held public companies too at times.
Company Law is very interesting and complicated. A shareholder having a substantial stake in the Company should be very careful as to how the Company functions and as to whether there is any chance for oppression and mismanagement. A substantial shareholder in a Company should always have an eye on the functioning of the Company and should keep track of all the transactions or the business.
an effective enforcement of provisions like 397/398 of the Act and the protection of rights of all shareholders without any scope for misuse or abuse is very important for the growth of industry or the corporate world. It is true that we have good regulations regulating the functioning of listed public companies, but, a good focus also to be made on the regulations governing private limited companies and especially the rights of shareholders in a private limited companies and unlisted public companies.
Section 397 and 398 of the Companies Act, 1956 deals with “oppression” and “mismanagement” by the majority in a Company against the Minority Shareholders. How to construe “minority” for the purpose of section 397/398 is dealtwith under section 399 which prescribes qualification to approach the Company Law Board under section 397/398 of the Act. What amounts to “oppression” and is oppression completely different from “mismanagement” as dealwith under section 398; is another interesting issue to look into.
It is well established position that Articles of a Company are constituent document and are binding on the Company and its Directors. As aforesaid, the intention of Article 57 is that the share capital of the Company remains within the close knit group and nothing more. On the plain language of the said provision and the intent behind it, the regime of Article 57 has no application to transfer of shares between member to member of the Company interest. There is force in the argument of the Respondents that from the contemporaneous situation, it would appear that all cap
