215. Power to acquire shares of shareholders dissenting from scheme or contract approved by 90% majority Flashcards
1
Q
- Power to acquire shares of shareholders dissenting from scheme or contract approved by 90% majority
A
General overview
[215.01] Briefly speaking, s 215 allows a person to make an offer to all the members of a company to acquire 90% or more of the total number of shares or classes of shares or units of shares in a company, and if that is achieved within four months, to make an offer to compulsorily purchase the remaining 10% of the shares from the minority. This is often called a “squeeze-out” right of the majority. As minority rights may be compulsorily acquired under this section, the Act provides protective clauses whilst ensuring that efficient amalgamation or reconstruction of companies should not be scuttled by the withholding minority shareholders but carried out in the best interests of the transferor company.
