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397/398 - Private Limited Companies - Share Purchase Agreements - Complications - a Case Study I have heard some corporates who are in dilemma as to which forum to be approached for protection of their corporate rights. We tend to see cases of oppression and mismanagement very frequently in Private Limited Companies or closely held companies. When there exist serious difference of opinion between or among substantial shareholders in the Company and when the required trust is lost, then, one group tries to oppress other in order to take control in the Company. For many reasons, when there is oppression and mismanagement in the Company, the aggrieved shareholders or the group may not resort to High Court for winding-up the Company on just and equitable ground. Instead, the minority or the majority in some cases approaches the Company Law Board seeking preventive and remedial measures in order to put an end to the matters complained of. The proceeding before the Company Law Board under section 397/398 is very complicated and there are many legal principles laid-down.I have seen some typical Share Purchase Agreements and connected litigation. If a petition under...more
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