varun 16 April 2017

Is share holder also liable?

I was director in a private limited company which has 5 directors. And i was resigned in 2012 from director position and i didnt even attend company meetings after that.and 2 out of 4 directors died in 2016 and there was misunderstanding between remaining two directors and they closed the company they didnt pay electric bills.before 6 months eb bills are send to two directors and i didnt received anything but before 15 days i got notice from local substation saying i had to pay eb bills of company or else they joint company bills with my house bill.they stating that i signed in agreement in 2010 while i was a director and resignation letter of mine in 2012 is not notified to eb office. How can i solve this problem? I am having 5 % share in that company. am i liable to pay or only directors and managing directors are responsible?

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6 Replies

G.L.N. Prasad (Retired employee.) 17 April 2017

A share holder is liable to the extent of his share only. In case of fully paid shares, unless a personal guarantee is offered, there is no lilability by share holders.

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Dr. MPS RAMANI Ph.D.[Tech.] (Scientist/Engineer) 17 April 2017

Yes as Mr. Prasad says a shareholder's liability is to the extent of his shares only. But if you have given personal guarantee you will be liable to the extent of such personal guarantee Fetch a copy of the personal guarantee given by you and see.

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Law Aspire (Legal) 11 May 2017

I dont think it is necessary that we should inform the resignation and appointment of director to each and every department and organisation . We have just see the persons who are directors on the date of default / cause of action.

rajagopal.s (Lawyer.) 15 May 2017

Hopefully at the time of your resignation in the year 2012, the remaining directors have informed of your resignation to Registrar of Companies.

In general a director is personally responsible to clear the companies dueswhen he has accepted personal liability either expressly or impliedly.

However from your query since you state that you had resigned from Directorship of the company in the year 2012, you will not be held responsible for repayment of dues to electricity department in your personal capacity.

However if the electricity department proceeds against the company, then in worst case scenario, the value of your 5% share holding might be reduced.

varun 16 May 2017

Thank you for your suggestions sir..yes I informed electric department about my resignation and show the evidence they stopped taking actions against me and and they said directors only responsible for the dues