• Regarding a private firm owned by two brothers and father

Hello , 

I am in a confusion regarding removal of share holder from my private firm . Let me explain the scenario . I am running a private firm for 3 years ( civil engineering services ) . In which I have my father and brother as share holders . Out of 5000 shares , my brother holds 3000 shares and I hold 2000 shares and rest 1000 shares are held by my father. 

Basically the nature of our work is to work for US projects . So typically everything has to be dealt over calls and emails. In this case , both my father and brother are illiterates while I am an ME grad . They are just sleeping partners . I work day and night for this firm from the beginning. 

Now I want to remove my brother from the share holders while he is denying to sign the papers though he had not given any capital amount for starting this firm . I am literally confused and stressed about this . Without doing any work he wants to be part of the firm . I have done many things to him after starting this firm like I have started a provision store , cement shop , pesticide shop in his name and many more help in form of cash . 

I have made a brand name for my firm with my clients . It will be really hectic for me to change the name of the company and reproduce the same reputation . 

PS : My Father is on my side . He also thinks my brother should sign papers for resigning himself from the share holders since my father also knows that I am the only person who work for this company .


Kindly help me with this .
Asked 7 years ago in Civil Law

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2 Answers

Your brother has 50 per cent share in the firm

2)you cannot force brother to resign from firm

3) get valuation of brother shares done by auditor

4) offer to buy out your brother

5)in the alternative start another company . Divert orders received from Us firm to new company

Ajay Sethi
Advocate, Mumbai
95205 Answers
7607 Consultations

5.0 on 5.0

Since it is a partnership firm you may send a notice to your brother intimating the termination of his partnership for the reasons that he is not committed to his work as he himself engaged with other businesses and also, not invested any amount as mentioned in the partnership deed and his code of conduct is not good as well.

You can also arrange an Extra ordinary General Meetings which was arranged by the other 2 partners on behalf of the Firm to show cause for the grounds mentioned above.

After that you can exercise the powers under section 33 of the partnership act and send a notice to your brother.

Prepare Minutes of the Meeting has been prepared and special resolution may be passed by the majority of the partners to expel

your brother from the firm.

After filing the removal of partner from the firm before the Registrar, you can issue a public notice to this effect in a newspaper.

T Kalaiselvan
Advocate, Vellore
85404 Answers
2236 Consultations

5.0 on 5.0

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