Sale of assests by a company

Put more details.

Simply i can say that the sale of asset shall be in ajenda to the board meeting and a board resolution to that effect is required. Once the board has resolved, thereafter the company can invite proposals/quotations etc with respect to the property. Get approval on any one of the proposal/quotation from the director and then the property can be sold.

The director of the company is required to sighn the sale agreement / deed.

The agreement/deed can be signed by the director or any other person duly authorised by the company vide board resolution.

Thank you sir, we are trying to sell off shares of another private company which our company holds as asset. So do you think that  the same procedure is to be followed.

Regards,

Sagnik Sanyal

if the matter relates to sale of shares by a public company or a private company, then it doesn't amount to sale of undertaking under section 293(1)(a) of the Companies Act, as has been decided in various cases i.e. it wouldn't require approval of sharesholders by postal ballot.

therefore such sale of shares shall be required to follow the normal process. the Board of Directors would approve this in a board meeting, unless there is already a committee constituted or some official already authorised to do it.

A share sale and purchase agreement be drafted for sale of shares to any third party. Section 108 need to be followed for transfer of shares and transfer stamp duty @ 0.25% is to be affixed on the transfer deeds. However, if the shares are in demat form, then such transfer duty is not applicable. the transfer need to be approved by board of directors of the Company, before it is recorded n the register of members of the Company, whose shares are being transfer.

Hope this helps.

Som Bathla

Thank you so much sir. Ours is a private company who is holding shares of a listed,  public ltd. company which is freely transferable, we wish to sell off the shares of that public ltd. company. In that respect will simply an approval at the board resolution be sufficient ???

Regards,

Sagnik Sanyal

in case of private company, section 293, anyways doesn't apply. Even if it is a public company, sale of shares of another company, doesn't constitute the sale of undertaking, as contemplated in section 293. you may refer to commentary in Ramaiya.