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ARTICLE · 19 MAY 2020

Minority: (Ex)Squeeze Me!

Luthra and Luthra Law Offices India
Luthra and Luthra Law Offices India
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The Companies Act, 2013 ("Companies Act") has afforded to the majority shareholders of a company, various options to buy out, or squeeze-out, the minority in a reasonable manner.

IndiaCorporate/Commercial Law
Jay Parikh
Jay Parikh
Ayushi Toshniwal
Ayushi Toshniwal
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Often times, minority shareholders in an unlisted company are in a position to block majority shareholders from passing resolutions or taking decisions that the majority shareholders may deem fit for the business and affairs of the company. Therefore, it becomes imperative for the majority shareholders to consolidate shareholding in the company to achieve better control over the business and affairs of such company without undue interference from the minority shareholders.

The Companies Act, 2013 ("Companies Act") has afforded to the majority shareholders of a company, various options to buy out, or squeeze-out, the minority in a reasonable manner.

This article explores various methods of minority squeeze-outs provided under the Companies Act vis-à-vis the novel method of minority squeeze-out that was notified by the Ministry of Corporate Affairs on 3 February 2020 as (a) Sections 230 (11) and 230 (12) of the Companies Act; (b) Companies (Compromises, Arrangements

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