1) if company is incurring loss fund infusion by shareholders is the best solution

2) seek forensic audit of company

3) if there is siphoning of funds by director file police complaint against him for cheating , criminal breach of trust under section 406, 420 of IPC

4) seek time from creditors to make payment

5)sue the director to recover the money

Please take note of the following -

1. Collect all the material records in against your 2% shareholder director and send him a legal notice asking an explanation thereto. Give him 07 days time to reply the same and do not reveal any documents to him in your legal notice.

2. After the gap of 07 days get a criminal complaint lodged against your 2% shareholder and director and submit all the material records along with the copy of legal notice and dispatch proof thereto. The said complaint will get lodged under section 420, 406 and 506 of IPC.

3. Start recording all the phone communications which you have with him from now on wards as that is useful for you in future.

4. After getting the complaint lodged start his removal process and dilution of his shares from the company and get it done as soon as possible.

5. After his removal from the company get the same notified in the newspaper (Hindi, English and Marathi all version) and reveal that he has been found guilty of fudging the data, documents and money of the company.

6. Based on all the above incidents he will be made liable to compensate for all the loss suffered by the company or else he will be going to jail for 07 years. Even if he goes to jail still some amount will be recovered from him by confiscating his personal properties which includes properties named on his family (inclusive of wife, children and parents). You will be able to safeguard your reputation and your non obligation to pay for someone else mess.

But most above, do not get perturb with the situation. Fight it with your full might and seek assistance of law especially criminal side.

Hello,

The liability of your company is the liability of two other shareholder also proportionate of their share in the company . I would like to suggest you to wait and watch for now and in the meantime file a criminal case against your indian partner .

Hope this helps.

Regards

1. You cannot be held liable for the entire losses, it involves all the partners, therefore it should be borne accordingly by all others.

While starting a partnership is much easier than incorporating there are rules and best practices that should be adhered to.

A partnership is an association of two or more persons who carry on as co-owners and share profits and losses.

Partners are personally liable for the business obligations of the partnership. This means that if the partnership can't afford to pay creditors or the business fails, the partners are individually responsible to pay for the debts and creditors can go after personal assets such as bank accounts, cars, and even homes.

2. Until there is any legal action by government side or any other competent authority, you cannot seek for postponement

You may wait for any notice after which you can plan suitable action requesting to defer the issue and seek time to make the payments.

3. Taxes are paid through the personal income tax filings of individual partners. As a partner, you have income through your share of the profits (or a loss if the partnership is losing money), and you report this income on your personal taxes. The partnership itself reports profits and losses to the IRS on a special form (so that the IRS knows how much you receive), and you pay the taxes on your portion.

If he derives any profits for himself from any transaction of the firm, or from the use of the property or business connection of the firm or the firm-name, he shall account for that profit and pay it to the firm

4. In unlimited partnership, every partner is liable, jointly with all the other partners and also severally, for all acts of the firm done while he is a partner. You can be held personally responsible for another partner’s negligence or carelessness. This means that if your partnership firm is insufficient to meet its financial obligations, you may have to use your personal assets to pay off debtors, even though you personally may not be at fault. The last-mentioned clause can be a big dampener for entering into a partnership, especially if you have insufficient capital.

Dear Client,

Above act of director comes under the definition Wrongful Gain and amounts to FRAUD and punishable u/s 447 of Companies Act and 420, 409 of IPC, Any documents forged ? File complaint.

Wrongful Gain” means the gain by unlawful means of property to which the person gaining is not legally entitled;

1.Is there any solution apart from me having to bear the entire burden of liabilities? -- Proceed under sec 447, if proved, all gains recoverable and no liability.

2.Is there any way to delay impending government action that can buy me enough time to accumulate the money? --- File FIR and on the basis of it, get stay from court on demand notice.

3.Is there any way where I can make my foreign partner accountable for the liabilities by means of which there can be some infusion of money to clear the debts? ---- Directors' personal liabilities for company debts can be proved if it can be shown that they performed any inappropriate actions, Rest can be advised on perusal of AOA.

4.Is there any solution of me not having to bear the financial liability at all like my partners? ---- Y/how all liability fasten on u, Demand notice is recoverable from company,

Company is a legal juristic person. The liabilities of the company cannot be extended to its directors unless the directors act fraudulently to the prejudice of the company, in which case those directors become personally liable to make good the lossess. So you don't have to personally shell out money from your pocket to clear the company's debts. The company's assets and properties can be attached and liquidated to clear the debts.