legal action against director of pvt. ltd. company

Dear sir I am one of the director of pvt. ltd. company.There are 4 directors in company. Managing director has removed funds for personal use from company current account . what legal action can be taken against him? Also, this company was formed in 2003. before that current managing director was having proprietary company in his name. while forming pvt. ltd. company in memorandum of articles it was mentioned that a proprietary company shall dissolve but now managing director has again started that proprietary company without permission of us what action can be taken against him?

Answers (2)

332 votes

You need to file a petition with the Company Law Board on the grounds of oppression and mismanagement. The CLB will pass the appropriate orders. The CLB is a specialized forum that understands the specific needs of corporations and their members. Relief is given quickly. If I could be of any further assistance in this matter do let me know.

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281 votes

This action of taking out funds of the company amounts to mismanagement and is against the interest of the company. Further if the business of the proprietorship concern is of a similar nature as that of the company then it is a breach of fiduciary duty by the Director. We can approach the company law board under Section 397 & 398 of the companies act.

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