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Rights of Director after resignation

I am a director in a company and I have made my mind to resign from the company. The company has assets worth Rs. 96 lakh and liabilities worth Rs. 70 lakh. I wanted to know if I resign from the company and pay my liabilities, will I have share in the assets or not?


862
Team Legistify

You are not entitled to assets by virtue of being a "Director." That right is only with a "shareholder." Often shareholders nominate themselves on the Board as Directors'. You will have to share your company's name as well as information on how much capital you had subscribed to for any lawyer to evaluate your rights. I recommend meeting a lawyer face-to-face.

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862
Team Legistify

You can immediately resign. Unless the Articles of Articles of the company concerned contain any specific provision about acceptance of resignation by the Board of Directors of the company, the resignation from directorship takes effect immediately, i.e., from the date of the resignation letter. You do not have to pay towards the Companies' liability (unless it is a Criminal/ Fraud Liability against you) nor can you claim in the assets of the Company. The Companies Act restricts the ability of a company to indemnify its Directors and officers against losses. The Companies Act, however, does not prevent a company from taking an insurance policy for its own protection against loss caused to it by its Directors. Further, the Director can take out a policy to recompensate the loss he suffers because of his liability to the company. The premium for such policy may be paid by the company itself.

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Tags: Legal Structuring

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