An Analysis Of Minority Squeeze-Out In Corporate Amalgamations: Legal Frameworks And Jurisdictional Insights

Abhishek Kumar, LLM, OP Jindal Global University, Jindal Global Law School

ABSTRACT

This research takes a close look at "minority squeeze-out" methods used during company mergers. In these cases, major shareholders can force minor shareholders to sell their shares. The study carefully examines the legal issues and challenges with these methods. History shows that laws have often ignored the complex problems of minority squeeze-outs. Lawmakers have given major shareholders the controversial power to "buy out" minor shareholders' interests. Focusing on Sections 235-236 of the Companies Act 2013, this paper analyzes various legal cases that have shaped how these laws are interpreted and applied. It investigates how courts have defined the scope and enforceability of squeeze-out mechanisms, providing crucial judicial insights into the balance of power within corporate structures. Further, the research transcends national boundaries to scrutinize comparable legislation in different nations. This cross-border examination aspires to unveil intricate revelations that could enlighten and potentially reshape the prevailing legislative terrain in India. The comparative analysis pursues not merely comprehending the legal machinery of minority exclusion, but also assessing its equity and efficacy in safeguarding minority shareholder rights while facilitating Merger and Acquisition. This study aims to make a major impact on the discussion about improving company laws. It suggests ways to create a fairer balance between the power of the majority and the protection of the minority during company mergers and takeovers.

Keywords: Minority squeeze-out, Major shareholders, Minor shareholders, Companies Act 2013, Corporate structures, Shareholder rights