New directors / shareholder agreement.
advbhosale
(Querist) 16 March 2015
This query is : Resolved
A is 33.33% shareholder in a company of two directors (indirectly 1/3 owner).
A wants to grow up directors business by crores of rupees and wants to increase capital every year Rs. One lakh till five years. Condition is that if such target of crores of rupees achieves than remaining directors shall pay appropriate profit (1/3 share equally) and if target does not achieve then A shall retain shares with him till five years and return it after five years. (i.e. agreement period is five years.)
My question is
1. what agreement we need to prepare? i.e. Shareholding agreement or MOU? Or only Simple agreement.
2. Whether such agreement required to notary or register before Company registrar?
3. What is the legal enforceability of it?
Experts are requested to guide on this.
malipeddi jaggarao
(Expert) 18 March 2015
Your query is not clear. On one hand you say there are only 2 Directors and you hold1/3 share holding. That means other director holds 2/3 share holding. Even otherwise if there are three directors including you, each has 1/3 sharing pattern. You want to increase the capital every year Rs.one lakh till five years. Condition is that if such target of crores of rupees achieves than remaining directors shall pay appropriate profit.
What do you mean by this? You want increase the capital by paying Rs.one lakh till five years - means Rs.5 lakhs. Where is the question or target of crores? How could you link the payment of profit to your additional contribution of share capital.
You cannot simply pay whatever amount you wish and increase your share capital. There is system in Company Law. You will have to pass the resolution, you will have file certain papers in the Office of Registrar of Companies. All these things will be looked after by the Company Secretary. You might have engaged the services of a Company Secretary while forming the company. Take his assistance again.
T. Kalaiselvan, Advocate
(Expert) 18 March 2015
Agreed with the expertise advise of expert Mr. Malipeddi Jagga Rao, nothing more to add.
Rajendra K Goyal
(Expert) 24 March 2015
Agree with the expert Malipeddi Jagga Rao.
