What is paid up capital of company
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whether any resolution passed regarding payment of salary to your partner
Who determines the director salary in a Pvt. Ltd. company?
My business partner holds 65% of shares and I own 35% of shares in a Pvt. Ltd. company. He takes a salary for his self appointed role of CEO and denies me salary stating insufficient funds. He has denied me access to all of the company's bank accounts stating that he will handle everything. I have recently discovered many transactions between his personal account and the company account. He states that they are loans from him to the company and the pay back. I have resorted to other forms of income without any clue on how to proceed. He's very wealthy and influential. Help
Asked 3 years ago in Business Law
7 Answers
You can report the same to the NCLT under appropriate section and seek information for the same. But send him a notice for inspection of the record. If he denies then go forward
You have to raise the issue only at your board meeting and find a solution. As yours is a private limited company, such matters are purely your internal affairs.
Section 309 of the Companies Act, 1956 provides that remuneration payable to directors shall be determined either by the articles of the company or by a resolution of the company in general meeting. The resolution may be ordinary or special, as the articles may require.
309. Remuneration of directors.
(1) The remuneration payable to the directors of a company, including any managing or whole- time director, shall be determined, in accordance with and subject to the provisions of section 198 and this section, either by the articles of the company, or by a resolution or, if the articles so require, by a special resolution, passed by the company in general meeting 1 and the remuneration payable to any such director determined as aforesaid shall be inclusive of the remuneration payable to such director for services rendered by him in any other capacity.
If you are aggrieved by the way of functioning of the other partner holding larger quantity of shares and you are being denied of your respective share in the profits or if he is not rendering the accounts of the company properly or if you suspect any malpractice then you may resort to legal steps as per procedures of law.
You can get clues about taking action against this illegal activity of the other partner from the articles of association, you may go through the same properly.
- Since, you are one of the partner , then legally he cannot do any transaction without getting your consent.
- However, you can check the Partnership deed for knowing , whether can handle the company account individually.
- If the deed is not having any clause or any transaction cannot be done without taking other partners consent, then legally you can take legal action against him
- You can file a compliant before the police and higher official for the offence of cheating , breach of trust and misappropriation of company fund .
- If no action , then you can file a complaint before Magistrate against him.
Hi
Ideally in case of pvt limited company, the EGM decides the salaries of directors.
In your case, it appears only 2 persons hold shares in the pvt limited company.
You can move National Company law Tribunal u/s241 of companies act for the offence of oppression and mismanagement by majority share holder.
transfer of company funds to personal account of promoter/director is prohibited by law.
Next steps.
1) Issue notice for rendition of accounts of company.
2) If your grievance is not addressed within 15 days, file a petition u/s241 of companies act before National Company Law Tribunal, Chennai.
Hope this information is useful.
Dear client,
You may file a case against him for theft from the company and denying you your salary. As a shareholder, even you have right to the same documents as him and he cannot refuse to disclose such documents.
Thank you.
