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Shareholder and director

Learner (Student) (409 Points)

13 May 2017

In a private limited company, a local managing director is holding one share and a NRI is holding 9999 shares of INR 10 each. Now, a local managing director wants to resign as a director and he does not want to be a shareholder also basically he wants to leave that company. From local managing director point of view, what are the procedure he has to follow in order get rid of this company.

Thanks in advance,

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3 Replies

Sudhir Todkar (CS Professional) (1021 Points)
Replied 13 May 2017

MD should file DIR 11 and send to Company for resignation. Thereafter company should file DIR 12 to ROC regarding his resignation and mentioned in the Board Report.

He shall transfer the share to exesiting shareholders of that company or as per the procedures laid down in AOA to transfer of shares.

However in the give case only 2 members are there out of which one of them is leaving the company and ceases to be a member.

In order to run the company it's should comply minimum no. of membership of 2 in case of private company.

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Learner (Student) (409 Points)
Replied 14 May 2017

Thanks Sudhir for your reply.

Should MD wait until company finds another member/shareholder? He wants to quit the company as a MD and shareholder as well. The NRI other director is forcing him not to pay salaries to the employees. The NRI director is also a partner in which Indian company is providing service to that partnership firm and NRI is not transferring any money to pay the admin charges to Indian company. Since this is against labour law, Indian director(MD) wants get out of the company as a MD and shareholder. Your input will be appreciated.

Thanks in advance.

Sudhir Todkar (CS Professional) (1021 Points)
Replied 15 May 2017

If such MD wants to quit from the company he can quit at anytime. However if there is an agreement between him and Company regarding no. of years to work in that company he should pay loss of compensation to Company for resigning before completion of tenure.

Company should increase the minimum number of members to 2 or more apart form this as per 149(3) every company should have at least 1 Resident Director who stayed in India for a period of not less than 182 days in previous calender year.