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Qualification Shares

Sagar Sharma (CA Final Fianance Executive) (111 Points)

06 July 2010

Please Let me know whether any Director can sell off the Qualification Shares after retirement or he need o surrender it to company?

Please let me know with a specific & justifiable grounds so that I can study that provision....

Thanks in Advance

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8 Replies

vivek (CS) (751 Points)
Replied 06 July 2010

If the shares are in the name of Director then one can sell it to anyone to whom he want provided their is no other understanding/agreement between the director and the Company.

Others views solicited.

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Ashish Gupta (CS & Legal) (114 Points)
Replied 06 July 2010

Pls check the Articles of Association of the Company.

If Articles are silent, then the Director can sell them to any other person, subject to other arrangements. Alternatively, he can keep them with himself in his personal capacity.

Rgds,

Ashish

Yogesh Shah (Managing Corporate Finance) (1051 Points)
Replied 06 July 2010

In my opinion,

It is totally dependent on concerned Director. He can either sell it to other person or he can hold it further and continue as a member of company instead of selling it

Other valuable views are awaited.

priyanka narale (PCC student) (407 Points)
Replied 07 July 2010

i guess its at the option of director. qualifacition sahres are the minimum number of shares a person must own, as provided in the articles of the company, in order to qualify to become a director of the company.

this means that its only the requirement to become a director, but since he is also a member (shareholdr) of the company to hold or sell the sahres after retirement is completely at his will.

mean its just my logic. n as far as i have gone throught the Companies Act, there is no such requirement to surrender these shares

Nitin Grover (CS) (1228 Points)
Replied 07 July 2010

Originally posted by : Ashish Gupta
	Pls check the Articles of Association of the Company. If Articles are silent, then the Director can sell them to any other person, subject to other arrangements. Alternatively, he can keep them with himself in his personal capacity. Rgds, Ashish

Dear

we have to check AOA of the comapny if its said to surrender the share(s) or sell only to existing promoters / directors then retering director can not sell otherwise no restrictions in generall.

Regards

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Ankur Garg (Company Secretary and Compliance Officer) (114773 Points)
Replied 07 July 2010

Yes after retirement or separation from the company he can sell or transfer his shares and that would be equal to end of his membership.

As per my opinion there is no need to check AOA as after separation from the company as a director AOA can not force him to continue as a member of company.

Regarding method of cessation as a member ---AOA cannot force him to surrender his share and other method of cessation of membership like transfer of share are available to him subject to the provisions of companies act, 1956.

Thanks

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Sagar Sharma (CA Final Fianance Executive) (111 Points)
Replied 07 July 2010

Thanks all of u for such valuable comments

C.A Trapti varshney (CA (ranker) B.com C.S) (125 Points)
Replied 12 July 2010

in my opinion there is no need to check AOA b'coz...........

sice he has resigned and no more associated with the company as director articles cannot bind him. he is at his free wil to deal with those shares he can either sell them or retain them as a mamber.