Dear All
Recently , I came to know a case in which a Director of a Pvt. Ltd Company submitted his conditional retirement letter to Board of Directors and the other 3 Directors have accepted the same.
Facts of the Case :
Two Partnership Firms merged and formed a Pvt.Ltd Company in 2012. All the Partners in the erstwhile Partnership Firm(s) become Directors of the newly formed Pvt.Ltd Company. Two of the Partners who were dominant partners in the Firms were given Rs.15.00 lakhs each as compensation to get their consent for the formation of the Pvt. Ltd Company.
The authorized Capital of the Company is Rs.10.00 lakhs , divided into 25 ,000 share each with a face value of Rs.10/-each.
Thus each share holder (only 4 share holders) is having 25,000 shares (Share Value : Rs.2,50,000/-each).
All the 4 Share holders become Directors of the Company.
As per the Memorandum of Understanding signed by the partners of the erstwhile firms the assets and liabilities were transferred to the newly formed Pvt. Ltd Company. As per the audited financials for the period ended 31/03/2014 , the value of liability was about Rs.82.00 lakhs , classified as Long Term Liability.
The retiring Director now claims compensation from the Company and only on receipt of compensation claim , he will confirm his resignation.
Please advice whether under the Indian Companies Act , 2013 and rules made therein , is there a provision for payment of compensation amount by the Company for vacating the Directorship of a person.
Thanking you
With Regards
fresh6plus 