One of the 3 director dies
aashish ramnani
(Querist) 29 May 2014
This query is : Resolved
dear sirs
i m son of one the three directors in a pvt. ltd. company.
my father died this march and now other 2 directors dont agree to take me his position as per will of my father i m a legal heir of all his property and legal things.
now i wanted to know about my rights and how can i make the other two directors for the settlement of the same.
KAMARAJ BHARATHY G
(Expert) 29 May 2014
YOUR RIGHT CAN BE SUBSTANCIATED BASED ON THE NUMBER OF SHARES OF THE COMPANY AVAILABLE IN THENAMEO YOUR FATHER. HENCE,YOU CONSULT ANADVOCATE, WHO IS PRACTISING IN COMPANYLAW.
aashish ramnani
(Querist) 29 May 2014
They are 66% and i m 33% & 1% is my mom n other two directors wife .... But wats accountability of twenty yrs given by my dad to this co. which became pvt. Ltd. seven yrs bk becauce of general buisness rule implied by indian laws.
R.V.RAO
(Expert) 30 May 2014
As you and your mother hold 34% shares as shareholders,you 2 are minority shareholders.the major shareholding of 66% is in other director's names.
you cannot legally insist to become director,in place of your father ,unless the articles of association stipulate for such succession.
Subject to articles of association of the company,the directors of a company may fill a casual vacancy caused by death of a director,who will continue till next annual gen.meeting,when he may seek reelection unless disqualified.
if the articles of association of the company allows,you may call for shareholders meeting to discuss the issue, but still the remaining other directors prevail being majority shareholders.
for serving the company for 2 decades,your father's loyalty must be rewarded.but shareholding pattern is in favor of the their directors.
wait for a right time to acquire more shares of the company from other shareholders,so that by becoming majority shareholder at a later date ,you will be in a position to get appointed as director.
Sankaranarayanan
(Expert) 30 May 2014
Well explained by mr Rao. No more details to be required. I do agree with him
malipeddi jaggarao
(Expert) 30 May 2014
It is a private limited company. Acquiring more shares over a period of time does not arise in normal course.
Though you and your mother cannot become Directors against the wish of Directors who are holding more shares, you will continue as ordinary members and you are entitled for the profits as per the sharing pattern.
Director or non-director - it does not have much significance in private limited company. If you wish to continue the business, you can as well float another company and continue the business with the good will earned by your deceased father. You can withdraw your shares from the present company and severe the contact if you do not have trust in the present board of directors.
aashish ramnani
(Querist) 30 May 2014
goodwill offered by them to withdraw from company is not good enough.
thats why we are looking for court of law to bring us some justice and seems we are still no where as per opinions i get from u all.
i want to know is there something in court of law that i can pressurize them to give a good out of court settlement amount as goodwill other than my investment in the company.
malipeddi jaggarao
(Expert) 30 May 2014
Mr.Aashish - as your father served as Director and rendered services to the Company, and as it is private limited company, any step resorting to legal action will not yield positive result. the litigation may take long time and there are no provisions for demanding good will by the legal heirs of the Director.
The best course is to rope-in the well wishers who can convince the present Directors to give you reasonable good will. If you are young, instead of wasting time and money in waging a loosing legal battle, better start your own business and prove yourself.
Guest
(Expert) 30 May 2014
The question is not of will of your father, but the shareholding pattern and the resolution in AGM in your favour to select you as a Director on the post vacated by your father on his death.
R.V.RAO
(Expert) 31 May 2014
though transfer of shares to outsiders is not allowed in a pvt.ltd.co.,such transfer of shares among existing shareholders of pvt.ltd.co is allowed.
so wait for the turn of time in your favor to buy out shares from other shareholders(if you are interested to buy and if you can afford to buy) to become a majority shareholder,and seek election as director, instead of expecting other share holder directors to pay good will .
or if you yourself can afford,bring some unsecured loans into company with a clause to convert same into equity in your name at a later date which will help you become a major shareholder,and can get elected as a director.
aashish ramnani
(Querist) 31 May 2014
Mr. rao can i hv your contactno. To talk to you plss
T. Kalaiselvan, Advocate
(Expert) 01 June 2014
Properly addressed by experts, especially by experts Mr. R.V. Rao and Mr. M.P. Jagga Rao on the issue. The author can have the contact details of M.r R.V.Rao from his profile available in the LCI Database.
