Whether default promoter's share be transferred to other

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This query is : Resolved

CA. Chikkerur C R (Querist)

05 June 2012
In my case, A private Co is formed by 4 Individuals & subscribed MOA & AOA. One of them, Mr X is now having issue with others. Mr X has not paid any amount as paid up capital
In this situation
1) Can We ask Mr X to sign from Directorship & Shareholding via a letter?
2) Since there was no amount paid by him, Can we ask him to mention in the letter “inability" & resign?
3) Do we require Transfer deed here? In this case, Co is started in November 2011 & MR X has not made any payments till today for capital. He is default

I need a draft of letter for resignation of a person from membership ( shareholding) or Do we need to execute a transfer deed in this case even though Mr X is not paid his share of money as paid up capital

Ajay Mishra

Ajay Mishra (Expert)

05 June 2012 Hi

person subscribing to the Memorandum shall become a member of the company on its incorporation and remains so till the company accepts his surrender of shares or he transfers shares. [U.P. Oil Mills Co. Ltd., In re (1931) 1 Comp Cas 262 (All)].

In that case, an entry in the Register of members is not necessary and mere allotment on the basis of subscription to Memorandum will suffice to constitute him as a member. Therefore, a subscriber is deemed to be a first member of the company and his membership is beyond revocation after the issue of certificate of registration.

A subscriber to memorandum of association is deemed to have agreed to become a shareholder, even if he submits no application and no allotment of shares is made to him. [Collector of Moradabad v Equity Insurance Co. Ltd. (1948) 18 Comp Cas 309 (Oudh)].

In accordance with the provisions of section 36(2)of the Companies Act, 1956, all money payable by any member to the company under the MOA or AOA shall be debt due from him to the company. Further, a subscriber to the memorandum must pay for his shares in cash even if the promoters have promised him the shares for services rendered in connection with the promotion of the company.

On this ground that he has not paid subscription money you can not take resignation from him.

Regards

CA. Chikkerur C R

CA. Chikkerur C R (Querist)

06 June 2012 thank you sir

but in my case, X director who is promoter & subsriber does not want to continue. So he is not interested in paying money for paid capital. So how to relieve him & even company does not want to have any relation with him

Since he is agreed to resign from directorship. Can we take another letter saying that even he does not want to pay subscribed capital amount & want to cease relation addressing to BOARD?. Then Board can alllot those among existing ones. Do we need intimate any changes in share holding tom ROC ?