Share certificate transfer

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This discussion clarifies the liability of shareholders versus directors in a company. While directors are solely responsible for fraud or tax evasion, a shareholder's involvement, even if they hold a share certificate, is generally limited to attending board meetings. If a director has committed fraud or failed to pay taxes, and the case is now in court, shareholders are typically not held liable, especially if they are not actively participating in board meetings.

Vishnu Gowda

Vishnu Gowda (Querist)

19 January 2023 Respected Experts

A few years ago I was a director of a company. I have resigned as director. Submitted to MCA. But I did not transfer the share certificate. If a company director commits fraud or does not pay taxes, are shareholders liable?

Thank You

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)

20 January 2023 Share holders not liable only directors liable.

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Vishnu Gowda

Vishnu Gowda (Querist)

20 January 2023 Thanks for the response sir.

I have discussed the same with the lawyer. If a person has a share certificate, he should attend the board meeting, he said. If any mistake is made by the directors. Share holder have to notice issue, it is the responsibility of the shareholders. But I am not attending any meeting. The current director does not hold any stake. He has not paid any tax for 3 years. Now the case has been transferred to court. He is not attending.

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)

20 January 2023 Only directors can attend board meeting not the share holders.
Only directors responsible for any legal issues.

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Vishnu Gowda

Vishnu Gowda (Querist)

20 January 2023 Thank You Sir........

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