Legal Question in Business Law in India

we are a group of 7 friends, and we started a company of our own in india. At first we all were the directors of the company when the company was incorporated according to company's act of 1956. But later on we came to know that the directors of any pvt. ltd firm can be seen online at the website www.mca.gov.in. The thing was we did not want the public to know that we all 7 are the directors, we wanted to showcase only 2 directors. So we 5 friends gave the resignation letter as a director. SO currently there are 2 directors only. Now we want to draft a contract which gives the remaining 5 friends equal profit share of the company . eg. if profit is 70,000 per month. every one should get 10,000 per month. if there is loss , even it should be equally divided. Is it possible to draft such a contract. ? please guide through

regards.

i got this reply

28.04.2013

Dear Sir / Madam,

You should ask your CA or Company Secretary who formed the Company and made the Memorandum & Articles to draft a suitable resolution to this effect.

Regards,

Fca Prashant Chavan

Expert Edge LLP

prashant.pscl07@gmail.com

Santosh Sadan, Khar (west), Mu, 400052

NEW QUESTION

Is it possible to be a equal partner and share profit and loss equally with the directors through a contract agreement , without being a director of the company. It will be okay if there are changes in memorandum & articles. we just want two things

1. equal distribution of profit & loss

2. we don't want to be the director of the company.

is it possible ?

Asked on 4/28/13, 6:18 am

1 Answer from Attorneys

Fca Prashant Chavan Expert Edge LLP
0 users found helpful
0 attorneys agreed

28.04.2013

Dear Sir / Madam,

In a limited Company, Profit is distributed in the form of dividend and is in proportion to the number of shares you hold, irrespective of whether you are a Director or not in the Company. If all the seven shareholders hold the same number of equity shares with only two of them being Directors, by virtue of their shareholding, they all will get the same share in the profit / loss of the Company.

Regards,

Read more
Answered on 4/28/13, 7:03 am

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