Wayout for deadlock situation in private limited company.

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Guest

Guest (Querist)

20 January 2014 In case of Private Limited Company, 3 Directors were on Board. One Director resigned on 10.06.2013 and other Director resigned on 15.06.2013. Now only one director is present and Company wants to run the show. What could be the wayout for this deadlock?

CS Adnan Shaikh

CS Adnan Shaikh (Expert)

20 January 2014 Dear Ishan,

Either appoint a new Director at current date and convince any one from both resigning Directors to tender resignation after appointment of new Director.

OR

Pass a back dated Board resolution for appointing new director before 15.06.2013.

Other views invited.

Regards,
Adnan

Guest

Guest (Querist)

21 January 2014 Back dating cannot be done and due to management conflicts they will not cooperate on this. I studies Table A provisions, so according to Regulation 75, when number falls below minimum requirement for want of quorum, remaining Directors or Director can hold Board Meeting ONLY for appointment of additional director or to send notice for EGM. So in my case I can now surely take help of this regulation. Also SS 1 support this. Let see any supportive case law is there! Thanks

Adv (CS) Vajani

Adv (CS) Vajani (Expert)

16 October 2018 Kindly refer Section 174(2) of the CA, 2013 and AOA for the remedy.
Section 174(2) provides that if the number of directors falls below the quorum then the continuing directors:

- may appoint a director in the meeting for increasing the number of directors to that fixed for the quorum or
- Summon a general meeting of the company to appoint a director and for no other purpose.

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