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Can 3 directors sack the 4th director ?

(Querist) 22 February 2015 This query is : Resolved 
I am one of the Directors in a Pvt Ltd company. We are 4 partners having equal share (25 % each)
My partners are planning to sack me.
1. Can they sack me without a valid reasons, if Yes what precautions should I take
2. What is the procedure to sack a Director

SAINATH DEVALLA (Expert) 23 February 2015
Dear Mr Shah,

If UR company is registered under the Company's Act 1956,The quorum of three directors are enough to sack the fourth one,but according to the procedures as laid down the MOU, U have written at the time of registration.At the outset 1st they have to serve U a notice to that effect,stating valid reasons for terminating U from being a Director giving U a minimum of 15 days time to reply. If satisfied with the reply,they have to conduct a general body meeting of the Directors and pass a resolution to that effect, everything should be mentioned in the minutes of the meeting.If it is not according to the procedure you can file a petition with the Registrar of Companies.
Brijesh Shah (Querist) 23 February 2015
In case they sack me, what about the Loans that have been taken by the company.
Who would be responsible / liable for repaying loans?

There are other loans where the Directors have taken in their personal / joint name and company is co-applicant. What would happen to this loan?

SAINATH DEVALLA (Expert) 23 February 2015

Every one of the Directors are responsible for the liabilities incurred during the period of existence.One thing is certain,they cannot sack U abruptly without taking notice of the Liabilities.In such case U must inform your nearest ROC about the happenings in the company.Answer one question,if U have not done anything fraud or anything contrary to the MOU of the company,U can file a petition with rhe ROC.The sacking notice they execute to is vital as the contents mentioned therein are important for U to fight.
Rajendra K Goyal (Expert) 23 February 2015
The liability would depend upon the terms of agreements while entering into the liability and provisions of memorandum / article of association.
Brijesh Shah (Querist) 23 February 2015
@ Sainath
Thanks for your advice
I will write to the ROC about the happenings in the company.

@ Rajendra
For better understanding I will refer to terms of Loan agreement & MOA

What would be in my favour
Should I resign myself or let them sack me
Anirudh (Expert) 23 February 2015
Whether you resign or get sacked, it will not absolve you of your liability incurred while you were the partner of the Firm.
SAINATH DEVALLA (Expert) 23 February 2015
There is no valid point in resigning now.That would givet the other Directors an upper hand.U have to clearly mention what has been entered in the MOU/Articles of the company to get the correct advice to proceed further.
T. Kalaiselvan, Advocate (Expert) 25 February 2015
It is advisable that you do not resign on your own, let them do it so that you can challenge the same which will be helpful for you to claim the benefits as well. Even otherwise, as rightly observed by experts, you may not be able to absolve from the liabilities during your tenure as a partner.
Ms.Usha Kapoor (Expert) 01 October 2016
Dear Client,

Procedure for removal of director in Tabular Form:
1. A (Special notice) of the intension to move a resolution for the removal of director be furnished by No. of members (according to requirement of Section- 115 of Companies Act, 2013) to the company at least 14 days before the meeting at which it is to be moved, exclusive of the day on which the notice is served and the day of the meeting. (Section 169)
2. The company shall, immediately after the notice of the intention to move any such resolution has been received by it, give its members notice of the resolution in the same manner as it gives notice of the meeting.
3. If is not possible for the company to give notice to all the members, publish by advertisement in the newspaper having an appropriate circulation not less than 7 days before the meeting.
4. The company must give intimation to the concerned director of the intended resolution by sending a copy of the special notice received by it, forthwith on receipt thereof. The director shall have the right to be heard on the resolution at the meeting.
5. The director, who is sought to be removed, can make a representation in writing against his removal and request the company to notify it to the company’s members [section 169]. If the director requests the company to notify the members of the company his representation against his removal and the representation is of reasonable length and it has been received not too late, the company must
(a) Mention in the notice of the resolution to be moved at the annual general meeting, the fact of the representation having been received; and
(b) Send a copy of the representation to every member along with the notice of the meeting if the representation has been received before sending the notice of the meeting or separately if the representation has been received after sending the notice of the meeting.
If the representation could not be sent to the members because it was received too late or because the company made a default in sending it, the company must read out the representation at the annual general meeting, if the director requires it to do so. In addition, director can make oral representation at the annual general meeting.
6. Hold and convene a General meeting to discuss besides others the following matters: To pass a [Ordinary resolution] for the removal of director.
7. In case of listed companies, file a copy of the proceeding of the general meeting in the Stock exchange (s) where the securities of the company are listed.
8. File [e-form no. 12] with the Registrar of Companies within 30 days of passing the resolution.
9. Pay the requisite fees, as prescribed by the Companies (Registration Offices and Fees) Rules, 2014.
10. Fees can be paid through Credit Card / by cash / by cheque in favour of “MCA Collection Account ICICI Bank” at the prescribed rates. Table of Fees given on this Link.
- See more at:
Raj Kumar Makkad (Expert) 02 October 2016
@Usha ji! Has author asked fresh question under this thread?

Why to revive such old query?

Jwab tabhi shobha dta hai jab koi puchhe.
Guest (Expert) 02 October 2016
Instead of Treating this As an Old Query the Contribution /Reply Of Expert Ms.Usha Kapoor is More Informative in Detail and Would Guide Other Experts who would Require the Same.Madam your Reply is Very Much Appreciated
Guest (Expert) 02 October 2016
Dear Shri NJS Rajkumar,

Your observation may be right to some extent, but of what use at present to the author, who would have experienced taste of the problem one year ago. That phase has already passed long ago. If really in problem, he would already have got the negative or positive result of the planning by the other directors. Even if the query was merely of academic interest, he would already have submitted his solution to the academic problem to his law school a year back.

Anyway, presently the reply can be considered to be serving an academic interest to enhance the knowledge of other experts or the other viewers.
Rajendra K Goyal (Expert) 03 October 2016
The author has not posted any new question, means he was satisfied.

Restart of discussion by experts may be a effort to further clarify the situation on old issue.
Guest (Expert) 06 October 2016
Thanks Mr.P.S.Dhingra Ji As Rightly Stated by Your Good Selves The Post Would Serve the Interest to Enhance the Knowledge of Other Experts Or Other Viewers who would Require the Same.It is better to Appreciate the Efforts of the Author .
Guest (Expert) 06 October 2016
Dear NJS Raj Kumar,

If you read the question vis-a-vis the position of the author, you can very well realise that the question was of academic nature. Had there been any truth in the story, the author being a Director of a company, could well have consulted a company laws expert before the planning of the other 3 directors could mature, as it was the guess of the author about there plan.

So, there existed no problem, only academic knowledge was sought.

However, if you think it proper to contribute your knowledge in the non-existing hypothetical problem, you are welcome to do so.

So far as appreciation of the knowledge of the expert is concerned, she really possess a very good knowledge on the subject matter that cannot be denied, but her input, if made on real problems with the needy people can be considered to be appropriately contributed and appreciated, instead of academic queries.

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