Guidance Required on Founder Dispute and Compliance Steps Before Filing INC-20A

[NEBIN BINOY]

Dear All,

We are currently facing a founder dispute situation in one of our companies and would appreciate your guidance on the correct legal and compliance approach under the Companies Act, 2013.

One of the directors has already been removed operationally from the company due to internal issues. However, there are a couple of legal complications that we need to resolve before proceeding with further filings:

1. The individual still appears in the MCA records as a director of the company.

2. Shares were initially allotted to him as a subscriber; however, he never transferred the subscription money (paid-up capital) to the company’s bank account.

3. The company has not yet filed INC-20A (Commencement of Business).

Since the subscription money for his shares was never received, our understanding is that those shares may be considered unpaid, and we would like to understand the correct legal treatment in this situation.

We would appreciate your guidance on the following points:

• Whether the shares allotted to him should be cancelled or forfeited due to non-payment of subscription money.
• The appropriate way to correct the shareholding structure before filing INC-20A.
• The safest and most compliant approach to proceed with the INC-20A filing once the above issues are resolved.

Our primary objective is to regularize all MCA records properly and ensure that the company remains fully compliant, especially since the company may pursue investors in the future and we want to avoid any issues during due diligence.

Please let us know the recommended steps, documentation required from our side, and the most efficient way to close this matter.

Looking forward to your guidance.

Best regards,
Nebin

[babita sharma]

Forfeiture is the correct legal route

Issue a Final Call/Notice

Pass a Board Resolution:

Update the Register of Members

Re-issue the shares

Form INC-20A must be filed within 180 days of incorporation. It requires a declaration that every subscriber to the MOA has paid the value of the shares agreed to be taken by them. 

Resolution First: Ensure the forfeiture process is completed before you file the form

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[Afsarjahan]

I agree with Ms. Babita Ma'am and section 169 can be followed for director removal if resignation letter is not possible to receive.

Regards

Afsarjahan

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[NEBIN BINOY]

Dear Babita Ma'am and Afsarjahan,

Thanks a lot for sharing the details.

Regards,
Nebin