In a private limited company there are three share holders A, B and C, who are all family members. A and B are permanent directors.
4 years back A decides to make C as his joint shareholder in some of his shares. The transfer takes place without proper procedure i.e share transfer form and stamp duty. The transfer was however approved by all A, B and C.
Today it has come to ligt that since the transfer procedure was faulty, there should be a correction.
To correct this a Special Resolution meeting is called and Rectification of share transfer register is done. All transfers done 4 years bak are made null and void. The share holdings of A, B and C which was 4 years back are restored. Neither A nor B nor C disputes this process as it was genuine mistake 4 years back.
My querry is
- Are Directors in a private limited company allowed to rectify their past mistakes in a share transfer register, where there is no dispute, and no aggrieved party?
- How far is this procedure legally correct?
- Are there any precedents?
CAclubindia
