Family business settlement
Panther
(Querist) 08 October 2011
This query is : Resolved
We are 5 directors in a family business 4 brothers and our mother.
A - Mother
B - Brother 1
C - Brother 2
D - Brother 3
E - Brother 4
There has been no contribution of D of any kind either in family or in business.
Few months back all a.b.c.d&e agreed that D and E will be separated from the business after taking their share. All their expenses will be borne by themself and their will be no joint expenditures. Few months back all account and liabilities for d & e were cleared.
All 5 members are still directors and the property is in the name of D & E.
My questions are :
1. Being unsupportive and no contribution of any kind, is D liable to have equal share in the firm.
2.What harm cud D or E can do to A B & C if any dispute arises in future.
ajay sethi
(Expert) 08 October 2011
you have stated taht there is no contribution of d and e . when you have agreed that d and e will have no share in business why keep them as directors ?
make a complete partition of the business .
Govind
(Expert) 08 October 2011
if in u'r account book and as per u'r agreement liability and right/shares of D and E clear then they have no right in profit or share in business but as u say they are still directors in business then they can claim salary for their work done in business as director.
most important if property is in name of D and E then they have whole right on property and they have right to claim rent for the same and also have right to eject u or u'r firm by ejectment suit in court on basis of not paying rent or need if any they have
prabhakar singh
(Expert) 09 October 2011
These matters are regulated by agreements mutually entered into.
While repeatedly using a term Directors ,yet you have not taken pain to tell us about the status of the business firm,if it is HUF or a
PARTNERSHIP or a COMPANY,private/public.
Your queries are related to astrology as prediction is not our business. we try to provide solution to set of a factual problem being actually faced by authors.how can we enter in their minds to know what harm they are planning to cause their brothers who themselves can not anticipate.
Come with facts and problem alone for solution so that no guess workberequired by us.
Arun Kumar Bhagat
(Expert) 09 October 2011
Directors are appointed in Company which is governed by The Companies Act, 1956. So the question of HUF or a PARTNERSHIP does not arise. By family business the querist probably means Closely held company. You have to initiate proceedings to remove D & E from the directorship of the company. So long they remain directors they shall ask for the same facilities as enjoined by other directors.
Panther
(Querist) 10 October 2011
Thank you all EXPERTS i highly appericiate your replies.
@Sh Prabhakar Singh Ji : The company is a private limited company. I very well understand what you meant by saying MY query is an astrological one and cant be predicted.
The fact is this that it was agreed by all directors to initially separate D & E by clearing their accounts and seprating from business will be followed after that.It was father's desire to move on like that as he always believed no one is dishonest and hence nothing wrong will happen. However I now feel it was a big folly and stupidity as minds and behaviours of D & E seems to be negatively changing and both are coming up with BUTs and WHYs. NOW Kindly suggest me (experts) what exactly should be done to escape from any further clashes/disputes which could be harmful to A, B, & C.
Thanks to all once again.
