In today’s corporate structure, the concept of ownership through holding decentralized shares is gaining attention because the functionality and the decision making processes inherent in companies are being made more democratic. The Companies Act, 2013 does not explicitly mention the term “Shares Decentralized”, but indeed there is critical detail in the company laws that seeks to ensure equitable decentralization of shares or even the transfer of shares to other shareholders.
This definition fits well with the culture which the Companies Act, 2013 intends to entrench in the application of the principle of decentralization in the corporate governance structures of companies. The Act promotes this concept by being open to various forms of ownership, regulation of share sales and purchases transactions and protection of interests of the minority shareholders.
As articulated in Section 44, shares are movable property and unless otherwise provided in the company’s articles of association can be freely transferred and in that sense tradable assets. This provision guards the liquidity of shares in sale markets and encourages investors within the region to have a wide range of shares to purchase from. Furthermore the Act seeks to protect the rights of minority shareholders through provisions in the 241 Act that deals with oppression and mismanagement of the company as well as the voting rights of minority shareholders which are consolidated in Section 47.
Also Read- COMPANIES ACT’S DEFINITION OF ULTRA VIRES
ARTICLE WRITTEN BY – Gaddam Sneha Deepthi
EDITOR – Nancy Sharma
