Section 108A - Restriction on acquisition of certain shares. - Companies Act, 1956

Restriction on acquisition of certain shares. [1] [108A. (1) Except with the previous approval of the Central Government, no individual, firm, group, constituent of a group, body corporate or bodies corporate under the same management, shall jointly or severally acquire or agree to acquire, whether in his or its own name or in the name of any other person, any equity shares in a public company, or a private company which is a subsidiary of a public company, if the total nominal value of the equity shares intended to be so acquired exceeds, or would, together with the total nominal value of any equity shares already held in the company by such individual, firm, group, constituent of a group, body corporate or bodies corporate under the same management, exceed twenty-five per cent of the paid-up equity share capital of such company. (2) Where any individual, firm, group, constituent of a group, body corporate or bodies corporate under the same management (hereafter in this Act referred to as the acquirer), is prohibited, by sub-section (1), from acquiring or agreeing to acquire except with the previous approval of the Central Government, any share of a public company or a private company which is a subsidiary of a public company, no (a) company in which not less than fifty-one per cent of the share capital is held by the Central Government; or (b) corporation (not being a company) established by or under any Central Act; or (c) financial institution, shall transfer or agree to transfer any share to such acquirer unless such acquirer has obtained the previous approval [2] of the Central Government for the acquisition, or agreement for the acquisition, of such share. --------------------------------- Notes:- [1] Sections 108A to 108-I inserted by the MRTP (Amendment) Act, 1991 w.e.f. 27-9-1991. Earlier the original sections 108A to 108H inserted by the Companies (Amendment) Act, 1974, Act 46 of 1977, w.e.f. 24-12-1977 and later omitted by the MRTP (Amendment) Act, 1984, w.e.f. 13-7-1984. [2] See rule 5B and Form 7D of the Companies (Central Government's) General Rules and Forms, 1956. Fee prescribed is Rs. 500.