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Funding in private company

Swati Sharma (TRAINEE) (328 Points)

23 September 2016

There are 2 scenarios kindly explain the role of disinterested member: 1. In a Pvt. Co. consist of 7 members...If existing shareholders sell their shares to non-Existing SH(Investor) and the disinterested Shareholder(1) neither pass the resolution nor sign the SHA. 2. If Co. goes for Private Placement, the said disinterested members again neither pass the Reso nor sign the SHA. Can a Pvt. Co. even incase of disinterested member can smoothly receive funding??

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J. Manivannan (Advocate & IP) (242 Points)
Replied 23 September 2016

Check your AOA is there any restriction on sale of shares by existing Shareholders.

1st Scenario:-

The Undisputed 6 shareholders can transfer their shares to new investor. The 7th shareholder either may continue or sale the shares are up to him.

2nd Scenario:-

It is based on the special resolution and majority directors assent. If the majority shareholders and Directors agreed, then the company can accept the funds by way of private placement though dissent given by the disinterested shareholder.