Legal Question in Bankruptcy in India

case against our company

a government enterprise has filed a case for recovery against our company. the case is against me and my dad since we both are the only partners in our company.

i need you advice, i need to know if we both are unable to pay the recovery amount, will this libilaty move to my son.

he is not a member of our company, but is there any chance that he will be asked for the recovery money incase we dont have the money to settle the recovery?

your advice will be very helpful.

thanks

ankush wadhwa


Asked on 1/15/07, 12:47 pm

1 Answer from Attorneys
Rahul Mishra Yolmo Mishra & Associates, Legal Advisors & Advocates

Re: case against our company

A company (should be a Pvt. Ltd. in your case) is an independent legal person distinct from the members constituting it. The members of the company are not owners of the company or its property unlike in the case of a partnership firm, which does not acquire a separate legal entity distinct from its partners. Hence, the members of the company are not personally liable for the company's debts either. The debts of the company are its own independent debts like the assets of the company, which are its own. Therefore, there is no question of the liability moving to your son when he is not a member of the company. This debt cannot even make you and your father personally liable (with exceptions).

Provided that for the above, you do not mean a partnership firm when you say "our company", and that the money was borrowed by and for the purpose of the company only and not by you or your father personally for your personal purpose.

I request you to consult a legal practitioner and seek his advice in detail at the earliest possible.

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Answered on 1/15/07, 10:11 pm


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