Transfer Of Shares In Public And Private Companies

Bhavya Belwal, Jindal Global Law School

ABSTRACT

The Indian Companies Act of 2013 and its pertinent clauses are the main subject of this research paper's investigation of the nature of share transfer restrictions in India.

Beginning with a discussion of property rights and the economic purpose they serve; the paper emphasis’s the value of freely transferable shares in enabling effective resource allocation. It makes a distinction between public and private organizations, noting that whereas private firms have the freedom to set transfer limitations via their articles of association, public corporations are distinguished by the absence of such limits.

The study then explores the judicial viewpoint on interference in situations involving the denial of share transfers. It emphasizes the standards established by the Supreme Court for assessing whether a board of directors acted in the best interests of the firm, followed the law, or had personal agendas when rejecting share transfers.