Uninterested subscriber of a newly incorporated company.

[saurav]

Hi Members,

One of the subscriber among four subscribers does not wish to continue as subscriber in a newly incorporated company, how to proceed further in this case ?

Saurav

[Gopal Rathnam]

• The (DIS-INTERESTED) subscriber may transfer the shares allotted to HIM to another person by executing a valid share transfer deed after share certificates are issued, subject to Board approval as per company articles.​

• The subscriber’s name will be removed from the Register of Members only when the transfer is registered by the company, and the transferee’s name is entered as a member.​

• If shares are not yet allotted, and the subscription money has not been paid within 180 days, the company may be unable to file Form INC-20A (commencement of business), resulting in non-compliance and potential penalties for non-payment of subscription money.​

• If the subscriber refuses to pay and the subscription money remains unpaid, the company may show the amount as receivables and pursue recovery or take necessary legal actions to forfeit the shares as per provisions, subject to Board and shareholders’ decisions.​

• In rare cases, if the non-payment of subscription money by all or most subscribers results in non-commencement of business, the Registrar may initiate action to strike off the company’s name from its register.