Liability of working director

Shivam goel (Querist) 01 May 2016 This query is : Resolved
Sir my client is working director in pvt ltd company. He has no shareholding. The company has dues towards PSPCL. Is he liable to pay these dues. Can he be denied new connection in his new firm due to liability of company he is working director in?

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DR.VEDULA GOPINATH (Expert) 01 May 2016

dear friend

A director of a company whether part time or full time irrespective of the fact that he is not a shareholder is in fiduciary position and thus liable for the loans of the company.

More so, a working director who is involved in the day to day affairs of the company is apparently liable for the financial transactions of the ocmany.

In few cases, the Hon. Courts have exonerated the liability of non-working directors if it is proved that the individual is not aware of the transaction.

For specific advice, you can send me the details of the company, transaction and liability. Also certain preventive steps can be taken to protect your client.

cs DR VEDULA GOPINATH advocate/arbitrator
vgnath@gmail.com 9866013121

Advocate Bhartesh goyal (Expert) 01 May 2016
Yes generally a working Director of company who is involved in day to day affairs of company is liable for all the acts of company but in few cases/ circumstances particular director or office in charge have been exonerated by courts.

H.M.Patnaik (Expert) 01 May 2016
Expert opinion given above is clear.
You have indicated that your client is a Working Director of the defaulting company, but did not say the reason behind such default in payment.s there any ongoing litigation on the demanded dues, deficiency in service on the part of service Provider?
Pl. enlighten on the same to for proper guidance.

Rajendra K Goyal (Expert) 01 May 2016
Clear advice from the experts. For specific guidance, consult lawyer dealing in company affairs / consultant in the field.