Directors disputes and non payment of share capital by subscriber after co is incorporated

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This query is : Resolved

shweta shukla (Querist)

09 August 2022 A company was incorporated in May 21. Post that, Due to conflicts between the directors the company, all of 3 directors refused to pay any amount.

Further,

No Current account is opened

No Commencement of Business was filed

1 director had resigned in December 21 and another in July 22.

What can be done in such case??

Aashok Kumar Sharma online

Aashok Kumar Sharma

(Expert)

06 July 2024 In the situation described, where there are conflicts among directors and no operational activities have commenced since the incorporation of the company in May 2021, here are the steps that can be considered:

1. **Resolution of Director Conflicts:**
- Attempt to resolve the conflicts among the directors through mediation or legal counsel if necessary. Resolving internal disputes is crucial for the smooth functioning of the company.

2. **Compliance with Statutory Requirements:**
- **Opening of Current Account:** Open a current account for the company to facilitate any financial transactions.
- **Commencement of Business:** File Form INC-20A (Commencement of Business) with the Registrar of Companies (RoC) to declare the commencement of business activities, if any business operations have started since incorporation.

3. **Resignation of Directors:**
- Ensure that resignations of directors are formally recorded and filed with the RoC using Form DIR-11 within 30 days of resignation. The resignations of directors who have already resigned in December 2021 and July 2022 should be filed promptly, if not done already.

4. **Financial Situation:**
- Assess the financial situation of the company and consider options for funding if needed, such as loans or investments, once internal conflicts are resolved.

5. **Company Closure (if applicable):**
- If it is determined that the company cannot continue due to irreconcilable differences or other reasons, consider voluntary closure or winding up of the company as per the provisions of the Companies Act, 2013.

**Legal and Professional Advice:**
- Seek guidance from a company secretary or legal advisor to ensure all statutory compliances are met and to handle any ongoing legal issues or disputes effectively.

**Future Course of Action:**
- Once internal conflicts are resolved and statutory compliances are met, plan and execute the business strategy of the company to move forward effectively.

It's essential to address the governance issues first and then focus on meeting all legal obligations to avoid penalties or legal complications in the future.

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