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Small Shareholders of Company

Meaning of Small Shareholder:

The Companies Act 2013 does not define the term ‘Small Shareholder’ of a Company.

However as cited in the Explanation to section 151 of the companies act 2013 (earlier Section 252 of the Companies Act, 1956), a Shareholder who is holding shares of nominal value of INR 20,000 or or such other sum as may be prescribed, will be considered as ‘Small Shareholder’.

*Nominal Value means the Face Value of Shares of a Company.

Note: However under different Rules/Regulation the minimum shareholding value to be counted as a Small Shareholder may change. For e.g. SEBI (Buy-Back of Securities) (Amendment) Regulations, 2012 requires a small shareholder of a listed company, who holds shares or other specified securities whose market value, on the basis of closing price of shares or other specified securities, on the recognised stock exchange in which highest trading volume in respect of such security, as on record date is not more than INR 2 lacs.

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