Resignation of the board of director

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

28 February 2012 Hello,

My husband is one of the four BOD in private ltd company by subscribing 10000 Shares @10/- each out of total share capital of 30000 shares of Rs10/- After this he has also invested Rs 200000/- into the business as working capital. But still company was not running up to his expectation and hence he decided to quit from the business by resigning from the post of director. Now the other BODs are refusing to pay back his Share capital amount of Rs. 100000/-even after the transfer of shares on the name of other directos, giving a reason that it was a working caital and company has incurred a loss so cannot pay you a capital money also.
My question is can they refuse to pay back the share capital of Rs. 100000/-????
Further what about the further investment of Rs. 2,00,000 which was invested as working capital????
Can't it be treated as loan to a company which can be paid back (probably after earning a profit)???

Please Guide me, i'm really worried about this issue..

Regards
Jigna

Ajay Mishra

Ajay Mishra (Expert)
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28 February 2012 Hi

On your first query, the answer is no..... he will pay the amount of Rs. 100000/- because he has given written consent for subscribing shares and the shares are already allotted to him.
On second query, my answere is what the loan document says, it means repayment schedule, interest etc..please check. and

On final query, whether the amount given by director to company is loan or investment, it will be depend on that documents.

Regards

Querist : Anonymous

Querist : Anonymous (Querist)

28 February 2012 Thank Mr. Ajay...But on your first reply i wants to make it clear that it is regarding paying back the capital of a BOD on transfer of shares at the time of resignation....

hence my ques. is whether my husband will get back his capital of Rs. 100000/- after transfer of shares or not????

can other director refuse to pay him the above amount??

As just few minutes ago..CA of a this company replied that it is totally depend upon the other remaining director of a company to gv or not to gv back the capital....

pls clarify me.....

regards
Jigna

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Ajay Mishra

Ajay Mishra (Expert)
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28 February 2012 Hi Jigna

In a case named In Re. Metal Constituents Co. (1902) 1. Ch. 707, it was held that a subscriber, by signing the memorandum bound to other members in a company. He has given written consent to become a member of the company and he can not withdraw.

Under section 36(2) all money payable by any member to the company under the MOA or AOA shall be debt due from the company.

It is mandatory to pay Rs. 100000/- to company.

Guest

Guest (Expert)

28 February 2012 Agree with Ajay Sir.

Querist : Anonymous

Querist : Anonymous (Querist)

02 March 2012 thnaks alot for your help....

Regards
Jigna