A Pvt. Ltd. Co. has six shareholders out of which four shareholders holds 70 percent of total shares while other two shareholders holds remaining 30 percent . Shareholders who holds 70 percent shares want to remove shareholders show holds 30 percent . Please tell whether this is possible. If so, what is the procedure.
If this is not possible, is there any means that value of shareholding of shareholders who holds 30 percent shares can be brought to 2 percent or 3 percent .
Majority Shareholders Seek to Dilute Minority Stake; Removal Not Permitted Under Companies Act. Options: Buyout or Issue New Shares. A private limited company with six shareholders is facing a situation where four shareholders, holding 70% of the shares, wish to remove the other two shareholders who collectively hold 30% of the shares. The query seeks to understand if removal is possible and how to reduce the minority shareholders' stake to 2-3%. The response clarifies that the Companies Act does not allow for the removal of shareholders. However, the shares held by the minority can be purchased, or additional shares can be issued to dilute their percentage. (AI Summary)
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