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Regarding a Private Limited Company.

(Querist) 02 October 2009 This query is : Resolved 
Myself,my brother and our uncle(my dad's brother) are directors in a pvt. ltd. firm in Pune.The premises where we manufacture belongs to my father in MIDC.It was mutually decided that me n my brother would resign from the firm and uncle would keep the firm but vacate the premises.My father wants us to resign only after my uncle vacates the premises and uncle wants us to sign before he vacates.My father has the fear that uncle will not vacate once we resign and uncle has the fear that we wont resign once he vacates.
Uncle has been handling transactions of the firm and we assume fraud activities since want to get rid of it ASAP so that we have no liability.
My Questions-
1)Any way-out so that both parties are satisfied?
2)Since me and my brother form majority,what rights do we enjoy to teach my uncle a lesson?
3)Is it possible to suspend a director in pvt. ltd. co., if yes how?
SRY (Querist) 02 October 2009
One more question-
4)What liability does my father has?Is it true that he cannot get the premises vacated just because the firm has all registrations at the address owned by my father?
5)No lease agreement was made between my father and the firm.Will that help?
Raj Kumar Makkad (Expert) 02 October 2009
It is better to execute an agreement between you both brothers on one side and your uncle on the other side which may contain all the terms and conditions including past history (ownership of premises, its rent and so on, further course of action etc. This agreement shall be based on mutual consideration and acceptance. You both shall offer resignation and your unce shall undertake to vacate the premises within a certain limit. Better get the agreement registered with registrar so that no party may refuse its contents and this may be got executed through court of law. I also advise not to open other litigation with your uncle in hurry and take every step with cold mind. You may engage a competent local lawyer for assisting you in this entire matter.
SRY (Querist) 02 October 2009
Thank-you very much Mr.Raj Kumar.
I truely appreciate your advice!!
Adv Lucky CS (Expert) 02 October 2009
There are many options in regards to the same.

I do agree with Mr. Raj.

You should enter into Memorandum of Understanding (agreement) with your uncle.

Stating that you shall consent to resign from the post of Directorship of the Company as on the date of vacation of place by your Uncle.

After that a form 32 needs to be filed with ROC of the respected state to register your your cessation from the Company.

For Suspension/Removal of Directors, refer Sec. 284 of Companies Act 1956, which states as under:

284. Removal of directors

(1) A company may, by ordinary resolution, remove a director (not being a director appointed by the Central Government in pursuance of section 408) before the expiry of his period of office :

Provided that this sub-section shall not, in the case of a private company, authorise the removal of a director holding office for life on the 1st day of; April, 1952, whether or not he is subject to retirement under an age limit by virtue of the articles or otherwise :

Provided further that nothing contained in this sub-section shall apply where the company has availed itself of the option given to it under section 265 to appoint not less than two-thirds of the total number of directors according to the principle of proportional representation.

(2) Special notice shall be required of any resolution to remove a director under this section, or to appoint somebody instead of a director so removed at the meeting at which he is removed.

(3) On receipt of notice of a resolution to remove a director under this section, the company shall forthwith send a copy thereof to the director concerned, and the director (whether or not he is a member of the company) shall be entitled to be heard on the resolution at the meeting.

(4) Where notice is given of a resolution to remove a director under this section and the director concerned makes with respect thereto representations in writing to the company (not exceeding a reasonable length) and requests their notification to members of the company The company-shall unless the representations are received by it too late for it to do so,-

(a) In any notice of the resolution given to members of the company, state the fact of the representations having been made; and

(b) Send a copy of the representations to every member of the company to whom notice of the meeting is sent (whether before or after receipt of the representations by the company);

and if a copy of the representations is not sent as aforesaid because they were received too late or because of the company's default, the director may (without prejudice to his right to be heard orally) require that the representations shall be read out at the meeting :

Provided that copies of the representations need not be sent out and the representations need not be read out at the meeting if, on the application either of the company or of any other person who claims to be aggrieved, the 1[Central Government] is satisfied that the rights conferred by this sub-section are being abused to secure needless publicity for defamatory matter; and the 1[Central Government] may order the company's costs on the application to be paid in whole or in part by the director notwithstanding that he is not a party to it.

(5) A vacancy created by the removal of a director under this section may, if he had been appointed by the company in general meeting or by the Board in pursuance of section 262, be filled by the appointment of another director in his stead by the meeting at which he is removed, provided special notice of the intended appointment has been given under sub-section (2).

A director so appointed shall hold office until the date up to which his predecessor would have held office if he had not been removed as aforesaid.

(6) If the vacancy is not filled under sub-section (5), it may be filled as a casual vacancy in accordance with the provisions, so far as they may be applicable, of section 262, and all the provisions of that section shall apply accordingly :

Provided that the director who was removed from office shall not be re-appointed as a director by the Board of directors.

(7) Nothing in this section shall be taken-

(a) as depriving a person removed thereunder of any compensation or damages payable to him in respect of the termination of his appointment as director or of any appointment terminating with that as director; or

(b) as derogating from any power to remove a director which may exist apart from this section.

Lucky A Popli
Krishnum Associates
Legal & Corporate Consultants
SRY (Querist) 02 October 2009
In the MOU stated above,can transfer commitments for immovable assets be included since the deal is that, we would resign and my uncle would withdraw his share from 2 properties in which he is a co-owner with 3 of us??

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