Conflict amongst directors in pvt ltd
Jassi
(Querist) 23 October 2013
This query is : Resolved
In a private limited company with 3 directors, having equal shares in their name, please suggest on below:
1. If 2 directors wish that the company becomes inactive or goes in sleep mode, is their any such option?
2. The company is not any business currently, and largely there is conflict with the third director. So the 2 directors want to start a new company of their own till the time this conflict is resolved. In such case, would it amount to any conflict of interest or any other legal obligation for the 2 directors? Nothing has been mentioned in the AoA of the company about such situation.
Ms.Nirmala P.Rao
(Expert) 23 October 2013
Dear Client,
Subject to the provisions of companies Act and the Memorandum of Association -a company may alter its articles of association at any time after its formation under Company Law by way of amendment through a special resolution or by unanimous agreement of all share holders at their meeting after giving due notice to the Director who's been removed etc. Such resolution should be approved by the Board of Directors. It it has the effect of converting a public limited compmay into a private limited company- sanction of the Central Government is necessary. If you wish to thank me for this reply please click the thank you button on my profile.
Devajyoti Barman
(Expert) 24 October 2013
Yes, if there is no such restrictions in the MOA or AOA then they can fairly start a new company and stop functioning the existing company.
Ms.Nirmala P.Rao
(Expert) 24 October 2013
As I suggested already- even if there is no proviso in the Articles of Association or restrictions etc limiting your legal ability to alter the AOA -at any time you can amend the articles of association and include your desires by inserting suitable provisions in AOA etc by following the above suggested procedure.
malipeddi jaggarao
(Expert) 24 October 2013
1. Pass a resolution and file it with ROC.
2. The two directors who wish to estabalish another company are free to do the same.
Jassi
(Querist) 24 October 2013
Thanks for your valuable advise. Please confirm again, if the current company is still functional on papers, can these 2 directors establish a new company in the same line of business? And in such, no legal obligation would arise for them?
Ms.Nirmala P.Rao
(Expert) 24 October 2013
Yes! you two remaining directors can form a new private limited company by altering the AOA by amendment by adopting the above procedure without incurring any obligations legal or otherwise. Also, you both can again form a Limited Liability Partnership( It'd be treated as separate entity in the eye of law as is the case with a company) In either case(LLP or LLC) etc, you can/should file a fresh application with The Registrar of Joint stock companys' under the Company Act 2013. Please click the Thank You button on my profile if you wish to thank me for this reply.
ajay sethi
(Expert) 24 October 2013
agree with experts
