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tina jain (manager)     07 June 2011

financial liability of director post resignation

A MLM company with 3 directors, A,B and C was started in Dec. A being the managing director. Their mode of working was to create a chain system of agents and earn commission basis that. A resigned from directorship before March and D joined as managing director. All had different agents and chain systems below each one. A post resignation repaid amount of all his agents and did settlement with them. In case any agent of B, C or D files a case for recovery of amount, will A be responsible for payment as on date or can a case be lodged against him also. Pls advise



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 3 Replies

pervez (adviser)     08 June 2011

No ... provided resigned director has filed necessary forms with RoC and has not given any guarantee for any loan or limit...

regards

tina jain (manager)     10 June 2011

A has duly filed form 32 with ROC and also has the board resolution passed of his resignation acceptance. No gaurantee has been given by A in any form to the clients made by he company.

As per the MLM concept, the members would get commission basis chain they make below them. In case, customer's under A did not make more chains they are not liable to get anything and i suppose, A or company is also not liable to payback the joining fee in any way.

But A in good faith, post resigning, paid back the amount to 1 agent for all his downline. At the same time, 1 did not give the same to his below downline. Now as on date, can any downline under A and 1 lodge a case against company and make A as accused.

Pls advice.

SzHusain_89 (associate)     13 August 2013

Mr. Pervez,

"No ... provided resigned director has filed necessary forms with RoC and has not given any guarantee for any loan or limit..."

Could you please support the statement made by you with any case laws

Thank you

 


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