Arbitration cases take around 2 years to be disposed of

2) C cannot delay arbitration endlessly

3) if you don’t want to go to court appoint arbitrator for resolution of disputes

For pvt ltd company you need minimum 2 directors

Best option is to go infor winding up of company

Hi,

In the partnership case:

1. C can not force any one to join the new partnership as the old partnership is dissolved due to the death of the partner Sec 42(c).

2.The partnership have no existence due to the death of partners.

3. If there is any dispute the court is ultimate way to settle the accounts. New partnership is not an option as this will create further dispute

4. It depends on followups by parties. May last long.

5. Some times "Yes" but not all the time. It depends on the court if the delay is unreasonable.

The Pvt Limited Company:

1. After the death of B, A has to introduce any legal hair of A or B as director because the company can not take decision with out the board of directors which should be at least 2.

2. If there is no restriction on transfer/sale of shares C can transfer even a single share and nominate him as director.( Deemed hairs of A and B have no objection) which is rare.

3.Winding up of the company is compulsorily in the court and both the entities can not be clubbed due to the different nature and legal positions.

1) Partnership firm- can C object for arbitration and drag it into a long drawn law suit: Yes it is possibility but as per the wish of the court only.

2) Without an arbitrator and creating a new partnership is it possible for all the beneficiaries to sit together and agree on appointing some authorised signatories for the operations of the bank account and sale of the fixed assets : If all are agree( better in writing) to follow this and partnership dissolution clause.

3) Pvt Ltd what is the current status of the company with a single director, can he anybody as director to keep it alive : Answered above

4) Is there any time limits for the new partnership to be formed :- If wanted to form may be any time when all the proposed partners agree.

5) Is there any time period for the Pvt ltd to add a new director: Yes as soon as possible because board of directors have to be formed to run the company and filing etc.

6) I am repeating my earlier q, since these cos are belong to the same family and they are dormant. Is there a chance to file for arbitration for both together: NO

If there is arbitration clause in partnership deed disputes can be referred to arbitration

2) you can enter into an amicable settlement for resolution of disputes without going to court

3) a case where there just two directors in a private company and one them resigns or dies then as per Section 174 (2) of the Companies Act, 2013, the continuing director can only act to appoint a new director or call general meeting and for no other purpose.

4) separate arbitration cases should be filed

Arbitration case will take around 1 year to get decided, and the same is the best method for the put of court settlement.

Also note the other party can not delay the proceedings endlessly.

Regards

1. Yes C can drag for a long suit, it is better that you resolve the matter amicably.

There is no time limit for appointing a new director but the same shall be done at the earliest. Also the only director shall continue to be the active partner and can take decisions for the company effectively.

I would advise you to settle all these matter amicably otherwise law suits will be a difficulty for all the parties.

Regards

It is not known whether it is a registered partnership and a clause is provided for arbitration. Usually the following rules apply in case of death of partner. Usually if you file a case before the court or handled by arbitrator it normally requires 6 to 18 months to conclude the adjudication.

When a partner dies, subject to any contract to the contrary, partnership is dissolved. Section 42 of the Indian Partnership Act, 1932 (“Act”) provides for dissolution of partnership on occurrence of certain contingencies which includes ‘death of the partner’ as one of those contingencies. Plain reading of the Section 42 would show that, subject to the contract between the partners, a firm stands dissolved by death of a partner. However, in cases where the terms of the partnership deed are silent on continuation of partnership’s business, a contract to continue the partnership after the death of a partner may be implied from the conduct of the parties. This means that where it is evident that such an intention was present, the nominee or legal representative of the deceased partner can take the place of deceased partner and business of the firm can be continued with the presumption that the partnership was never dissolved on the death of that partner. The above legal position is based on two assumptions- (a) there are more than two partners in the firm, and (b) the legal representatives are interested in taking forward the business of the firm.

Utilise the arbitration clause

1) C says he can settle only if the new partnership is formed since they have no access to the bank accounts and also cannot dispose the fixed assets

If the partners (majority) died, then the partnership firm stands dissolved automatically.

In such an event, the surviving partner can draw the entire amount and settle all the liabilities of the firm to all of them who are due to that.

The legal heirs of deceased partners also can claim their shares out of the amount drawn by the surviving partner.

2) C says if we dont form a partnership it will end up in court

C cannot force the unwilling legal heirs of the deceased partners to become partner, he can be sued for non-settlement of amount due to the deceased partner.

3) Is there a way of settling without going to court and without forming the partnership

There can be a settlement peacefully done if there is no dispute among you all.

4) How long does it take for an arbitration case to settle

It depends on various factors.

5) Can C delay it endlessly of he wants to

You all should pressurise him through various modes for an expeditious settlement

1) What are C's options if none of the legal heirs join as director

clause 69 of Table-F of Companies Act 2013 for reference.

69. The continuing directors may act notwithstanding any vacancy in the Board; but, if and so long as their number is reduced below the quorum fixed by the Act for a meeting of the Board, the continuing directors or director may act for the purpose of increasing the number of directors to that fixed for the quorum, or of summoning a general meeting of the company, but for no other purpose.

In case of death of director it is termed as casual vacancy and its to be compulsirly filled by BOD at the board meeting.,and in his place the new director appointed shall hold the office upto the date which the director appointed in whom place would have held office if the positions not vacated. Board Resolution for cessation of Director who is died.,as per Companies Act, 2013, Form DIR-12 is to be filed in case of resignation, cessation, or death of director. After filing DIR – 12 you must need to file DIR-11 to intimate ROC for resignation from a particular company.

Practically it is advised to first appoint additional director by filing eform DIR-12. Then file cessation of director in eform DIR-12.

2) Can this be clubbed along with the partnership for Arbitration

This may not be possible.

1) Partnership firm- can C object for arbitration and drag it into a long drawn law suit

The law suit or arbitration are again legal procedures only.

The suits in courts are not dragged on endlessly on such issues, hence if arbitration clause do not attract this situation you may better approach civil court itself directly.

2) Without an arbitrator and creating a new partnership is it possible for all the beneficiaries to sit together and agree on appointing some authorised signatories for the operations of the bank account and sale of the fixed assets

This is not necessary when the partnership firm is dissolved automatically if the partners have died leaving only one of them surviving.

3) Pvt Ltd what is the current status of the company with a single director, can he anybody as director to keep it alive

Regulation 69 of the Schedule I of table F of the Companies Act says The continuing directors may act notwithstanding any vacancy in the Board; but,if and so long as their number is reduced below the quorum fixed by the Act for a meeting of the Board, the continuing directors or director may act for the purpose of increasing the number of directors to that fixed for the quorum, or of summoning a general meeting of the company, but for no other purpose. The continuing directors may act notwithstanding any vacancy in the Board; but, if and so long as their number is reduced below the quorum fixed by the Act for a meeting of the Board, the continuing directors or director may act for the purpose of increasing the number of directors to that fixed for the quorum, or of summoning a general meeting of the company, but for no other purpose. So in light of the above provisions , the continuing director can appoint director to conform the statutory limits only.

4) Is there any time limits for the new partnership to be formed

5) Is there any time period for the Pvt ltd to add a new director

6) I am repeating my earlier q, since these cos are belong to the same family and they are dormant. Is there a chance to file for arbitration for both together

For all the above three questions , the opinions given above suits them.