In order to ask this question, a small background of the situation is to be given.
There is an existing company with 2 directors A & B. A director C is inducted to the board of the new company as the CEO & MD to take care of its activities. Director C joins the board as a salaried individual, under the generation of an offer letter to pay the salary and transfer of equity. After joining, director C finds the health of the company to be much worse than it was conveyed to him. The equity transfer takes place in time, but seeing the bad health of the company, Director C is not able to draw any salary for the first month.
Director B had promised funding at regular intervals to boost the company's health. But the same was not received as per the promised discussions. Director C works with the company for 2-3 months and realizes that he is stuck in the company which is led by Directors who have not been truthful to him. He decides to resign and he does that. Note that Director C has not taken any salary over the period of his work, which was supposed to be paid to him, and also shows as outstanding in the company's account.
Now, the questions:
1. What are the legal ways out for Director C, so that he can get his salary from the remaining Board of the company? Should he go ahead and file a case against the company itself, will that be advisable considering he is still a part of the board. He has offered resignation, but board resolution has not been passed yet.
2. Is it right for the Director C to use the company credit account to purchase assets and hold on to the same, unless the payment is done by the board? Has it got any legal implications? It looks unethical as it may be an act of blackmailing, but what is the law on the same?
3. What will happen of the equity shares held by the Director C? As per the company AoA, shares belong to Director C and cannot be taken from him, but no transfer or sales of the same can take place without the board resolution.
4. What is the best way to end it amicably for Director C, despite confusion and constant threats from Directors A and B (unfounded threats which have no basis, like, you have misappropriated funds, etc.)?
Please guide.
