Legal Threat from Startup Co Founder

Question

Hi We three partner started a Company and then a fourth co founder was added after few months and shares were given to him. He is one of the director in our company. The fourth co-founder and us had a MOU that he will be initially given 10 of the shares and later 15 after few months and initially he invested a sum of 500000 in the company. All was going well and we initial members were doing most of the tasks while the fourth co founder was nearly a silent director. Later on after paying salaries and operational costs the fund crunch arrived and we were unable to raise fund. We decided to work for sometime in other firms and raise money to restart again. The Initial directors have hardly taken 100000 from the investment money and still managed to save around 100000 which was later returned to him as the company condition didnt seemed good and we didnt wanted the 4th co founder to loose all the money. But now this 4th co founder is threatening to take legal action. We have all the documents regarding everything and the expense statement also which was also been shared to him from time to time. All the whatsapp and mail communication are also there. We want to know what remedy do we have here as this is giving a severe mental trauma to us. Kindly help

Vidhikarya · Accepted Answer

Dear Client If the Company is registered under the Companies Act 2013 then in the prevailing situation when a dispute or difference between the Directors of the Company arises any Director or all the affected Directors jointly can make an application to the Registrar of the Company for resolving the dispute between the directors through mediation.  In general parlance mediation means an intervention of some neutral third party in a dispute with the intention of resolving the dispute. Sec 442 of the Companies Act 2013 authorizes the Central Government to maintain a panel of experts to be called as mediation panel for the purpose of effectuating mediation between parties during any proceedings pending before the Central Government or NCLT or NCLAT. The Ministry of Corporate AffairsMCA notified the Companies Mediation and Conciliation Rules 2016 which provides rules and guidelines for empanelment as Mediators or Conciliators. The Rules ensure that the Panel acts in good faith by specifying certain ethics that should be followed by every member of the Panel these include upholding principles of natural justice towards the parties especially by keeping in view of the relationship of faith that should be maintained throughout the proceedings. According to this provision the parties to the dispute may voluntarily apply to the relevant authority i.e. Central Government NCLT or NCLAT as the case may be to refer the matter to the Mediation Panel to facilitate the parties to arrive at an amicable settlement. The mediation process is cost-effective and less time-consuming when compared to adjudication before Courts Tribunals or even arbitral tribunals. If the settlement does not arrive between the parties to the dispute then the panel may refer the matter back to the relevant authority for adjudication of the matter.  You need to consult with a corporate lawyer for further guidance and steps.

Vidhikarya · Answer

Dear SirAt this initial stage itself you may lodge complaint against the persons who are threatening you and settle the claims atleast by taking postdated cheques.

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