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How to dilute shares of minor share holder

Anil (Director) (25 Points)

27 June 2012

We have a pvt ltd company with 5 directors, one of the directors has been found mentally instable and he owns 6% in the company, as this is not helping us to grow the company nor with the issues raising everday. company is in losses for the tune of approx 30 lakhs and we offered this share holder Rs.3lakhs to transfer the share but he is not willing to do that, this has become a issue for us as we are not able to grow this nor get investments. Can we increase our capital and dilute his shares or can we have a meeting and vote for his exit. Please advise the right way.

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3 Replies

CS RAJESH C.CHOUDHARY (ASSISTANT MANAGER) (14607 Points)
Replied 29 June 2012

Dear Anil Kumar,

Removal of director is a separate issue and so is diluting the shares. The best option is to dilute the shares of the said director and remove him from the directorship, further you say he is mentally unstable, if so it becomes one of the grounds for disqualification as a director but not as a shareholder.

Regards,

RAJESH CHOUDHARY

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Anil (Director) (25 Points)
Replied 29 June 2012

Can we increase capital and dilute his share holding.??

Rahul Patel (Accountant) (26 Points)
Replied 10 August 2012

I would like to know the way in which we can dilute the shareholding of an existing share holder if he is not a director. Also, if the shareholder has 20% stake in the company can he/she stop the others from diluting?