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CS Executive · Setting Up of Business, Industrial and Labour Laws · Corporate Entities - Companies

A tribunal makes an order under Section 340 against Vihaan Traders Pvt Ltd, a body corporate, in a fraudulent-conduct matter. Dinesh was a director of the company at the relevant time. Under Section 341, what power does the Tribunal have regarding Dinesh?

The Tribunal may make a similar declaration or pass a similar order against Dinesh, because he was a director of the body corporate at the relevant time. Section 341 extends liability to directors and partners, so the company's separate personality does not protect him.

  1. AIt may pass a similar order in respect of him as a director at the relevant timeCorrect
  2. BIt cannot touch him because the company is a separate legal person
  3. CIt may act only if he was also a shareholder
  4. DIt may act only after the company is dissolved

Explanation

Section 341 says that where a declaration under section 339 or an order under section 340 is made in respect of a body corporate, the Tribunal also has power to make a declaration or pass an order in respect of any person who was at the relevant time a director. Separate personality therefore does not shield the director. Shareholding or dissolution is not a condition.

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