Section 76 — Restriction on transfer of shares by the members of a private company

(1) Notwithstanding anything contained in section 75, a member of a
private company desirous of selling any shares held by him, shall intimate to the
board of his intention through a notice.

(2) On receipt of such notice, the board shall, within a period of ten
days, offer those shares for sale to the members in proportion to their existing
shareholding:

Provided that a private company may transfer or sell its shares in
accordance with its articles of association and agreement among the shareholders,
if any, entered into prior to the commencement of this Act:

Provided further that any such agreement will be valid only if it is filed with

the registrar within ninety days of the commencement of this Act.

(3) The letter of offer for sale specifying the number of shares to which
the member is entitled, price per share and specifying the time limit, within which
the offer, if not accepted, be deemed as declined, shall be dispatched to the
members through registered post or courier or through electronic mode.

(4) If the whole or any part of the shares offered is declined or is not
taken, the board may offer such shares to the other members in proportion to their
shareholding.
(5) If all the members decline to accept the offer or if any shares are left
over, the shares may be sold to any other person as determined by the member, who
initiated the offer.
(6) For the purpose of this section, the mechanism to determine the price
of shares shall be such, as may be specified.