Section 244 of CA 2013 : Section 244: Right To Apply Under Section 241

Explanation using Example

Imagine a scenario where XYZ Pvt. Ltd. is a company with a share capital, and there are concerns among certain shareholders regarding the company's affairs being conducted in a manner prejudicial to the interests of the company or its members. According to Section 244 of the Companies Act, 2013:

• If XYZ Pvt. Ltd. has 800 members, then as per clause (a), either at least 80 members (one-tenth of the total members) or any members holding at least one-tenth of the issued share capital can come together to apply under section 241.
• These members must have paid all dues on their shares to be eligible to apply.
• If two shareholders jointly hold a share, they are considered as one member for the purpose of this application.
• If the shareholders meet the criteria but find it cumbersome for all eligible members to make the application, just a few of them can obtain written consent from the rest and file the application on behalf of everyone.

This provision empowers the shareholders of XYZ Pvt. Ltd. to take action if they believe the company's management is acting against the best interests of the company and its shareholders.