Presently Iím working in a Private Limited Company which has two sisters company in another name and all are registered under ROC, MSME.
In the year 2013 the company made huge loss on the project job and thereafter started to loss in every year, though the balance sheet was shown profitable every year to gain some government facilities. The payments of Sundry Creditorís portion and Employee Benefit were also started to highly affect from that time. After that company faced NCLT on allegation by one of his sundry creditor on 2018 and on 2020 company declared as NPA by his mother bank. In the interim period (from 2013 to till date) the management of the company neither terminated any one of his employee nor given regular Employee Benefit to his employee. Huge Employee Benefit started to be accumulated since then and is unpaid till date. Whenever we the employees faced with the management (Managing Director), the management had given us the false assurance that they will pay the dues.
Presently, the management of the company is trying to do fishy activity by developing the same category business on the name of one of the sister company to avoid the unpaid dues of their mother company.
Under this circumstance my questions are below Ė
i) Can company do the same category business in the name of Sister Company under the same office address by ignoring the mother one?
ii) How the employee will recover their huge dues, when the company was declared as NPA by the bank?
iii) Working as employee in the company, Shall we proceed for legal activities against the company?
iv) Can Company terminate any employee under this situation?
My earnest request to the senior members is to kindly respond to my queries to help us proceed further.
My response to the queries are as under:
1. A registered company is a legal entity and is distinct and different from its share holders. So there can be two companies under the same roof doing same or similar business.
2. When the parent company is declared as NPA, the stake holders including employees are only entitled to proporationate share of its liquidated assets. This probably would require some proactive steps from the side of employees to get their share.
3. Yes to protect your interests you need to become a party in the case in hand.
4. When the company is not functioning and is declared NPA, there is de facto termination. It is better to search for alternate job
From India, Mumbai
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