Resigned - board of director (pvt. ltd.)

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

13 May 2013 Hello,

I am Mr. Patel, owner of Private Limited firm in Ahmedabad, Gujarat.

We are four director in this company. We incorporate in year of 2008.

Out of us one director has resigned by email and not handover any work which was done by him. Just run away without any work handover by very next day after resign.

After several days we came to know that he is working with an organization who are involved same as our companies business.

We are wondering that he may be disclosed our companies business secret, operation details etc.

Please give me a suggestion, can we take a legal action for him or company where he is joined. If yes then what type of action should be taken against a board of Director ?

Waiting for your reply ASAP.

Mr.Patel

Querist : Anonymous

Querist : Anonymous (Querist)

16 May 2013 Dear Experts,

Please reply me as early as possible.

Thanks

Asha Kanta Sharma online

Asha Kanta Sharma online

(Expert)
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21 July 2025 Hey Mr. Patel,

Thanks for sharing the situation. Here’s a quick overview of what you can do regarding a director who resigned abruptly and may have leaked your company’s secrets:

1. Director’s Obligations After Resignation
Even after resignation, a director owes fiduciary duties and confidentiality obligations to the company.

Disclosing confidential business information or trade secrets to a competitor (or any third party) can be a breach of trust and violation of fiduciary duties.

2. Possible Legal Actions
a) Injunction / Restraining Order
You can approach the court for an injunction to restrain the ex-director from using or disclosing any confidential information related to your company.

This can prevent further damage.

b) Breach of Contract / Fiduciary Duty
If the director had signed any Non-Disclosure Agreement (NDA) or there are clauses in your Articles of Association or contract relating to confidentiality, you can sue for breach of contract.

Otherwise, breach of fiduciary duties can be argued.

c) Civil Suit for Damages
You can claim compensation for losses incurred due to misuse or disclosure of confidential information.

d) Action Against the Competitor Company
If you have evidence that the new employer company is knowingly using your confidential info or encouraging breach of fiduciary duty, you can sue for inducing breach of contract or fiduciary duty.

3. Immediate Steps
Send a legal notice to the ex-director reminding him of his confidentiality obligations and demanding he ceases any wrongful use or disclosure.

Consider a legal consultation with a corporate lawyer specialized in intellectual property and company law to evaluate your case in detail.

Check your company’s agreements (Articles of Association, employment contract, NDAs) for specific confidentiality or non-compete clauses.

4. Prevention for Future
Ensure all directors sign confidentiality agreements and non-compete clauses.

Implement a formal handover process during resignations to protect business interests.

Summary:
You can take legal action if you have evidence of breach of confidentiality or fiduciary duties. Start with a legal notice and consult a lawyer for possible injunction and damages suit.

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