129. Notice of refusal to register transfer by private companies

Question 1

129. Notice of refusal to register transfer by private companies

Answer 1

General overview
[129.01] Section 129 details the procedure which the company has to adhere to when refusing to lodge a notice of transfer to the registrar and also when it refuses to effect the transfer of shares, debentures or any other interest in the company.

Question 2

Notice of refusal

Answer 2

[129.02] A private company may make a notice of refusal in two situations: (a) when the company refuses to lodge a notice of transfer of shares pursuant to s 128(1)(a); and (b) where the company refuses to register a transfer of any debenture or other interest in the company pursuant to s 128(1)(b). The company shall then give a written notice to the transferor and transferee stating the facts which are considered to justify the refusal within 30 days of the application: s 129(3).

Question 3

Time period to give refusal

Answer 3

[129.03] The directors must consider the matter whether to register the transfer or not within a reasonable time, failing which the transferee is entitled to registration. Under English law, the period is two months. Once the decision is made within two months, their decision is effective even though it was not communicated to the applicant within that period: Popely v Planarrive Ltd [1997] 1 BCLC 8 . Where the company had no directors within the two-month period following receipt of a notice to register the transfer, the transferee was entitled to registration: Re New Cedos Engineering Co Ltd [1994] 1 BCLC 797 . In Singapore, the Act has prescribed a period of 30 days from the date of lodgment of the transfer: s 129(1) and (3).

[129.04] The courts may examine the validity of the reasons given for refusal to register the transfer. The directors in exercising their discretion for the registration of the transfer of shares have to exercise it for its proper purpose