Fraud by partners of the company

We, 3 people, started this company as a part-time thing. We registered the company as pvt. ltd in bangalore and made parents of one partner as MDs We had a verbal contract of partnership with equal share. 2 years later, other two partners conspired and re-distributed the shares among themselves. (i was not aware of this) After another year, one partner left and he was paid in cash for his separation (1/3rd of company value). We continued working for another year and company grew. And then i got to know about the conspiracy. I decided to leave and he refused to pay anything. Advice?

Answers (1)

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Whenever a director works dishonestly to the interest of company, he will be held liable for breach of fiduciary duty. Most of the powers of Directors are ‘powers in trust’ therefore, should be exercised in the benefit of company and not for their own benefit or for the benefit of other members. You can file a criminal case against the other directors of the company for the criminal breach of trust under section 405 of IPC.

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