Who can apply for relief against oppression and mismanagement?

In case the company is not having share capital then, 1/5th of the member can apply for an application against oppression and mismanagement. In case of one person has a right to file an application, the person shall have the consent of all the other members in written form.

What is oppression and mismanagement in a company?

The simple meaning of ‘Oppression’ is that it is an unjust or cruel exercise of authority/ power. Whereas, ‘Mismanagement’ means conducting affairs in some prejudicial, dishonest or inept manner.

What is Section 397 of Companies Act 2013?

Notwithstanding anything contained in any other law for the time being in force, any document reproducing or derived from returns and documents filed by a company with the Registrar on paper or in electronic form or stored on any electronic data storage device or computer readable media by the Registrar, and …

Who are called minority shareholders?

Minority shareholders are the equity holders of a firm who does not enjoy the voting power of the firm by the virtue of his or her below 50% ownership of the firm’s equity capital. Fiduciary Duty Owed by Majority Shareholders: The majority shareholders owe a fiduciary duty to the minority shareholders.

Which of the following requirements must be satisfied for seeking a relief under section 397?

3. The oppression must be continued in nature – It is settled position that a single act of oppression or mismanagement is sufficient to invoke Section 397 or 398 of the Companies Act. No relief under either of the section can be granted if the act complained of is a solitary action of the majority.

What is the difference between mismanagement and oppression?

Oppression is specifically dealt in the Section 241 of The Companies Act, 2013. It covers continuing acts and the acts which have been concluded. Moreover, ‘mismanagement’ indicates the working of a company in a manner which is prejudicial to the public interest or the interest of a company.

What is oppression under Companies Act, 2013?

The term ‘oppression’ is not clearly defined by Company Law 2013, the court of law defines is conduct that involves a visible departure from the standards of fair dealing and a violation of conditions that require fair – especially with regard to the right of shareholders.

What rights does a minority owner have?

A hallmark right of the minority owner is the right to prosecute legal actions on behalf of the company when those in control of the corporation refuse to do so. For corporations, BCL 626 authorizes minority shareholders to commence an action on behalf of the corporation for injury to the corporation.

What are the powers of National Company Law Tribunal in case of oppression and mismanagement?

Remedy of oppression and mismanagement. Power to hear grievance of refusal of companies to transfer securities and rectification of register of members. Protection of the interest of various stakeholders, especially non-promoter shareholders and depositors.