Prince 23 November 2022

Pvt. ltd directors past/parallel business.

Hello all,

I am going to start a new business as a private limited company.

In which I will have a second director/share holder initially who already has some existing businesses. I don't know about the details of these existing businesses and their ethical/legal operations.

I wanted to know that if something (bad) happens to the second directors existing businesses, will/can it affect my business?

If so how can I safeguard it?

The other director will be having a minimum share holding and will be an ordinary director in the company. But he will be investing some money.

Thanks.

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Quick Summary

Starting a new private limited company with a director who has existing businesses can raise concerns. This discussion explores whether past or parallel business activities of a director can negatively affect your new venture. It also seeks advice on how to safeguard your company from potential legal or ethical issues arising from the co-director's other operations, even with minimal shareholding.

2 Replies

P. Venu (Advocate) 24 November 2022

Admittedly, you are ignorant of the person or his business! Is not the query too hypothetical?

Prince 24 November 2022

Hi Mr Venu,

Thanks for replying,

The person offered me some money/investment in exchange of him beaing one of the ordinary director and some share and dont have any other contribution in the business operations.

I'm not saying he or his business is unethical or something. I'm just curious that can his existing businesses affect my business if he is one of the director.