Can minor be a share transferee in the pvt ltd company

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

18 January 2012 can minor acquire the shares in the private company? what is the procedure to be followed? is it necessary to make declaration under section 187C of the Companies Act, 1956? Is it necessary to create trust for transfer of shares to minor?
please assist in this regard

CS Suraj Arora

CS Suraj Arora (Expert)
Follow

18 January 2012 Dear friend

Please take note that a minor can not be a Member of the Company.However a guardian on behalf of Minor can hold shares while following provisions of section 187 C of the Act.

For removal of Your doubts,I want to bring in your Kind Notice that as per the India Contract Act Minor can not be entered in to a Contract and any Contract entered in to by him will be treated as Void.However a Guardian on behalf of Minor can enter in to a Contract.The same is in case of Shares.

I hope your doubts be cleared
Regards

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)
Follow

18 January 2012 If, transferee is a minor, transfer of shares is to be effected in accordance with the provisions of the Articles of Association of the company. Where shares to be transferred are fully paid-up, companies can transfer the same in favour of minor through his/her guardian.

Upgrade to CAclubindia Pro. Subscribe Now!

CS Suraj Arora

CS Suraj Arora (Expert)
Follow

18 January 2012 Dear Sir

I am Very sorry But I want to know How Articles of Association Will effect Transfer to minor.What kind of clause must be there in Articles to regulate this transfer.beyond this point that only through guardian a minor can acquire shares what are the other clauses in the Articles can regulate such transfers....

Seeking your valuable Comments....

Ragards

Parashar

Parashar (Expert)
Follow

18 January 2012 In my opinion the Articles of Association cannot override the applicable statutes viz, companies act, 1956 and the Contracts Act, kindly appreciate. Let us wait for others views also.