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Transposition of Shareholders

Ram Deshmukh (no) (40 Points)

27 November 2018

what is the pro n cons when done transposition of shareholders.

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kapil gupta (217 Points)
Replied 28 November 2018

transposition of shareholders occurs in case of joint shareholding.
under Companies Act,2013 lets assume 2 person apply for joint shareholding then the joint holder whose name appears first in register of member shall be called SENIOR MEMBER and who shall be first entitled to all notices and exercising of Voting rights at general meetings and second jointholder will be entitled to excercise voting rights only if first doesnt excercise the same.
pro is for senior member who gets all the priority
con is for 2nd jointholder who gets 2nd priority
But if joint holders apply for transposition of name so that the order in which their name stand in register of member can get changed.
In that case 2nd jointholder will become senior member and 1st jointholder(senior member earlier) will not get same priority in rights as he used get that earlier.
Thanks

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Shrikant (Associate) (350 Points)
Replied 03 December 2018

In case of Joint Shareholders, it is always better to make arrangement between those joint holders regarding the rights attached to concerned equity or preference shares held by them so as to avoid future issues.

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