Being Pushed Out, Diluted or Bought Out Below Value? Do Not Sign Yet.
Do not sign share transfer forms, resignation letters, amended shareholders' agreements, settlement or no-objection documents.
Do not accept a valuation report prepared or commissioned only by the other side.
Do not transfer or pledge shares or sign board or general-meeting resolutions you have not reviewed.
Preserve records now: cap table, financial statements, bank statements, minutes, emails and MCA filings.
Act promptly. Courts and the NCLT consider delay when deciding interim relief in oppression cases.
Disputes over the value of shares and the division of a business are rarely only about money. They involve control, family relationships and years of work. They are also time-sensitive: a fresh share allotment, a board resolution or a transfer can change your position quickly.
Pramanika Legal combines valuation strategy with the right forum — NCLT, Delhi High Court or arbitration — and moves for interim protection before assets or shareholding are altered.
When Business, Shares or Assets Need to Be Divided
- Partner exit, retirement or dissolution of a partnership or LLP
- Deadlock between equal (for example 50:50) shareholders or directors
- Oppression or mismanagement by the majority, including siphoning of funds or assets between group entities
- Dilution through a preferential allotment or rights issue, or a refused or fraudulent share transfer
- Buy-out or squeeze-out at a price the minority believes is too low
- Founder and investor disputes over exit rights, valuation and shareholders' agreement terms
- Family business split, including HUF and sibling divisions of shares, assets and goodwill
How Shares Are Valued in a Dispute
There is no single “correct” value. Valuation depends on the method, the valuation date, and the assumptions used, and each is usually contested. Under the Companies Act, valuations in many corporate actions must be carried out by a registered valuer (Section 247), and the NCLT commonly relies on an independent valuer's report.
| Method | Best used for | Common point of dispute |
|---|---|---|
| Discounted cash flow (DCF) | Going concerns with forecastable cash flows | Projections, growth rate and discount rate |
| Net asset value (adjusted book value) | Asset-heavy, real-estate or holding companies; break-up scenarios | Revaluation of assets; ignores earning power and goodwill |
| Market or comparable multiples | Businesses with genuine listed or transaction comparables | Choice of comparables; private-company data is limited |
| Earnings capitalisation | Stable, profitable businesses | Which year's earnings are “normal” |
Discounted cash flow (DCF)
- Best used for
- Going concerns with forecastable cash flows
- Common point of dispute
- Projections, growth rate and discount rate
Net asset value (adjusted book value)
- Best used for
- Asset-heavy, real-estate or holding companies; break-up scenarios
- Common point of dispute
- Revaluation of assets; ignores earning power and goodwill
Market or comparable multiples
- Best used for
- Businesses with genuine listed or transaction comparables
- Common point of dispute
- Choice of comparables; private-company data is limited
Earnings capitalisation
- Best used for
- Stable, profitable businesses
- Common point of dispute
- Which year's earnings are “normal”
The largest fights are usually over minority discounts, control premiums and marketability discounts. A share transfer can also have tax and stamp duty consequences, so we coordinate with your chartered accountant before any price is agreed.
Legal Routes: Where Your Dispute Goes
| Route | Legal basis | Typical relief |
|---|---|---|
| Oppression and mismanagement | Sections 241–242 Companies Act, 2013 (NCLT, New Delhi) | Buy-out at fair value, regulation of company affairs, removal of directors, setting aside of transfers or allotments. Eligibility under Section 244 (broadly 100 members, or 10% of members or share capital; NCLT may waive) |
| Refusal or wrongful share transfer; rectification of register | Sections 58–59 Companies Act | Registration or rectification of the register of members |
| Winding up on just and equitable grounds | Section 271 Companies Act | Last resort for irreconcilable deadlock or breakdown of trust |
| Dissolution and accounts of a partnership | Indian Partnership Act, 1932 (Sections 44 and 48) | Dissolution, valuation of goodwill and assets, settlement of accounts |
| Commercial suit | Commercial Courts Act, 2015 (Delhi High Court) | Injunctions, damages, accounts; pre-institution mediation under Section 12A unless urgent interim relief is sought |
| Arbitration | Arbitration and Conciliation Act, 1996 (Sections 9 and 11) | Interim protection and appointment of arbitrator where the shareholders' agreement or partnership deed has an arbitration clause |
| Family or HUF division | Hindu law; family settlement | Division of family business, shares and assets |
Oppression and mismanagement
- Legal basis
- Sections 241–242 Companies Act, 2013 (NCLT, New Delhi)
- Typical relief
- Buy-out at fair value, regulation of company affairs, removal of directors, setting aside of transfers or allotments. Eligibility under Section 244 (broadly 100 members, or 10% of members or share capital; NCLT may waive)
Refusal or wrongful share transfer; rectification of register
- Legal basis
- Sections 58–59 Companies Act
- Typical relief
- Registration or rectification of the register of members
Winding up on just and equitable grounds
- Legal basis
- Section 271 Companies Act
- Typical relief
- Last resort for irreconcilable deadlock or breakdown of trust
Dissolution and accounts of a partnership
- Legal basis
- Indian Partnership Act, 1932 (Sections 44 and 48)
- Typical relief
- Dissolution, valuation of goodwill and assets, settlement of accounts
Commercial suit
- Legal basis
- Commercial Courts Act, 2015 (Delhi High Court)
- Typical relief
- Injunctions, damages, accounts; pre-institution mediation under Section 12A unless urgent interim relief is sought
Arbitration
- Legal basis
- Arbitration and Conciliation Act, 1996 (Sections 9 and 11)
- Typical relief
- Interim protection and appointment of arbitrator where the shareholders' agreement or partnership deed has an arbitration clause
Family or HUF division
- Legal basis
- Hindu law; family settlement
- Typical relief
- Division of family business, shares and assets
What We Establish in the First Meeting
- Is it a company, LLP or partnership, and is it private or public?
- What do the articles, shareholders' agreement or partnership deed say about exit, valuation and dispute resolution?
- Is there an arbitration clause that decides the forum?
- What is the correct valuation date and who should value the business?
- Are assets on the books, off the books or held in related entities?
- What interim protection is needed to stop allotments, transfers or removal of assets?
