MCA has notified amendment in CAA Rules, for the introduction of the definition “corporate action” and has laid down the complete procedural step in respect of the purchase of minority shareholding held in Demat form, by inserting new rule 26 A.
Major amendments: –
- Company shall complete verification of details of minority shareholders within two weeks from receipt of an amount equal to the price of shares that the acquirer intends to acquire from minority shareholders under Section 236 of CA 2013.
- After verification is completed, the Company shall send notice to minority shareholders, intimating them about cut-off dates.
- Upon receiving the necessary information from the Company, the depository shall transfer shares of minority shareholders, who have not transferred on their own, into the designated account of Company, on the cut-off date. Company Secretary shall be authorized for the purposes of effecting the transfer of shares.
- Upon transfer of shares, the Company shall immediately disburse the price of the shares so transferred.
Effective date: Dec. 17, 2020
Source: Companies (Compromises, Arrangements and Amalgamations) Second Amendment Rules, 2020