Pre-emptive rights

sruti gupta (Querist) 24 March 2012 This query is : Resolved
Can a Shareholder of a PVT. Ltd. Co. pledge its shares to an outsider. ??
Can it be done without informing the other shareholders ?Can the Company use the provisions of Sec. 81 of the Companies Act, for this purpose. ?

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Chanchal Nag Chowdhury (Expert) 24 March 2012
No. He cannot.

sruti gupta (Querist) 24 March 2012
In that case can the Company issue new shares to an outsider person...??

C. P. CHUGH (Expert) 25 March 2012
Private Ltd Companies are managed, mostly by close relative or group of individuals. Transfer of shares by one individual to another individual is subject to the approval of the Board and if approved by the board a new certificate is required to be issued to the new share holder. Hence there is a remote possibility to transfer share without the knowledge/approval of other shares holders.

sruti gupta (Querist) 26 March 2012
can the private ltd. Company issue/allot new shares to an outsider/third party...?

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