Legal Question in Business Law in India

Can you please help with the legal standing on this one.

Our company has been trading as a Private Ltd Company since 2008 with three director who own equal share i want to resign and start my own similiar business my as both of them are working with public limited comany and i am putting my 100% my main question is - CAN WE START OUR OWN COMPANY LEGALLY, in competition with our old company.we have no contract signed orther than MOA and AOA.

Is there any law that he can stop us from trading or sue us as current directors.

Thank You

PFL


Asked on 9/24/13, 7:15 am

1 Answer from Attorneys
Fca Prashant Chavan Expert Edge LLP

25.09.2013

Dear PFL,

YES, you may start your own Company and be its Managing Director. With the diverse emerging business opportunities and huge volumes, you may continue to serve as a Director in your present Company to run and manage its existing line(s) of business, and you may run the new allied business in your own Company. Our Constitution and the prevailing Companies Act, 1956 permits you to remain a Director in more than one limited Company.

YES, if and only if, there is a specific mention by way of a clause in the Memorandum of Association (MOA) and Articles of Association (AOA) that prohibits you from independently engaging in any line of business of the Company, the Company may initiate action to sue you and prevent you from independent trading.

Regards,

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Answered on 9/24/13, 9:44 pm


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