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Director exit dispute

Pvt ltd 240 views 1 replies

Hi Guys,

Here is the situtation.

There are two directors in a company. Director A holds 65% and director B holds 35% stake.

Director B want's to exit since company's performance is very poor.

From starting of company, no salary was taken by director B for one year, but he was developing software.

Now he does not want to continue because of poor performance of the company.

Now director B wants to exit, but Director A is denying saying that Director B can only exit if he signs non comete clause means i can not sell similar software anywhere else after leaving company.

Any idea?

What should be the solution to this? 

Replies (1)

you cannot stop a director from leaving. all he needs to do is to submit a resignation.  Unless there is a prior share-holder's agreement, you wont be able to force the director to sign a non-compete or reject his resignation.


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