Remedies for Non-Registration of Share Transfers
When a private or public company refuses to register the transfer of shares, various remedies are available to the aggrieved party.
1. Request for Explanation
- The shareholder can request a written explanation from the company regarding the refusal.
- Companies are required to cite valid reasons under the Companies Act for such refusals.
2. Appeal to the Registrar of Companies
- If unsatisfied with the explanation, the shareholder can appeal to the Registrar of Companies.
- The Registrar has the authority to intervene and direct the company to register the transfer if deemed appropriate.
3. Legal Action
- The aggrieved shareholder may initiate legal proceedings against the company.
- A court can order the company to register the transfer if the refusal is found to be unjustified.
4. Seeking Damages
- In cases of wrongful refusal, shareholders may claim damages for any losses incurred.
- This may include loss of dividends or market value due to delayed registration.
5. Alternative Dispute Resolution (ADR)
- Parties may consider mediation or arbitration to resolve the dispute amicably.
- This can be a faster and less costly alternative to litigation.
6. Company’s Articles of Association
- Review the company's Articles of Association, as they may provide specific procedures and remedies related to share transfers.
- If the refusal contravenes these provisions, additional grounds for action may exist.
In conclusion, shareholders have multiple avenues to address the refusal of share transfer registrations, ranging from informal requests to formal legal actions. Understanding these remedies can empower shareholders to protect their rights effectively.