Appointment of managing director in private company

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Querist : Anonymous

Querist : Anonymous (Querist)

05 September 2014 what is the Procedure of aPPOINTMENT OF MANGAING DIRECTOR IN pRIVATE COMPANY?

is it mandatory to hold general meeting or Board meeting is sufficient for appointment of MD in Private Company.
if both meeting is mandatory, then we need to file twice mgt 14.

does MR-1 is also needed.

CS Mitesh Mehta

CS Mitesh Mehta (Expert)
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06 September 2014 The appointment of a managing director and the terms and conditions of appointment
and remuneration payable must be first approved by the Board of directors at a meeting and then by an ordinary resolution passed at a general meeting of the company.

Section 196(5) provides that subject to the provisions of this Act,where an appointment of a managing director is not approved by the company at a general meeting, any act done by him before such approval shall not be deemed to be invalid.

According to my view, only once MGT-14 need to be filed i.e within 30 days from the date of passing board resolution.

A return in the prescribed form viz. MR.1 is required to be filed with Registrar within 60 days from the date of such appointment.

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Querist : Anonymous

Querist : Anonymous (Querist)

06 September 2014 Actually , i have already filed DIR-12 with Board resolution specfying only that dirctor is redesignated as MD for a term of 5 years.

Signatory details now showing him as MD , what i need to do further.

It is a small private Company. If Mr-1 need to be filed than only BR is to be attached.
Agm will be held on at the end of September, wii i pass one resolution for confiramtion of appointment of MD in that AGM.
I have one more doubt remuneration provision are covered under sec 197 which are applicable on public company.

please suggest.

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CS Mitesh Mehta

CS Mitesh Mehta (Expert)
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06 September 2014 1. File Form MR-1

2. In AGM pass ordinary resolution

3. There is No Restriction relating to managerial remuneration for a Private Company

Querist : Anonymous

Querist : Anonymous (Querist)

06 September 2014 MGT 14 need to be filed with BR or Ordinary resolution. Pls specify.

MR 1 will be filed after approval in AGM?

MR 1 need to be filed within 60 days. Therefore i can wait as difference between BM in which appointment is made and AGM is less than 60 days.

Shuld i darft any trems and conditions of appointment or simply pass OR specifying that Shareholders approve the redesignation of director to MD.

Pls specify. I am very confused.

CS Mitesh Mehta

CS Mitesh Mehta (Expert)
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06 September 2014 1. File MGT 14 with BR

2. MR-1 need to be filed within 60 days from date of passing BR

3. A notice convening Board or general meeting for considering such appointment shall include the terms and conditions of such appointment, remuneration payable and such other matters including interest, of a director or directors in such appointments, if any.

Querist : Anonymous

Querist : Anonymous (Querist)

06 September 2014 Can you please provide me the draft format.
I will add the terms and condition of appointment in Explantory statement and file the same along with the BR in mgt 14 and MR1

Does it fulfiil the requirements as per Co ACT 2013

CS Mitesh Mehta

CS Mitesh Mehta (Expert)
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06 September 2014 “RESOLVED THAT pursuant to the provisions of Section 196, 197, 203 and any other applicable provisions of the Companies Act,
2013 and the rules made there under (including any statutory modification(s) or re-enactment thereof for the time being in force), read with Schedule V to the Companies Act, 2013 and Articles of Association of the Company the consent of the shareholders of the Company be and is hereby accorded to appoiont/ re-appoint Mr. ____________ as Managing Director of the Company for a period of ______years with effect from _________________.

FURTHER RESOLVED THAT pursuant to the provisions of Section 196, 197, 203 and any other applicable provisions of the Companies Act, 2013 and the rules made thereunder (including any statutory modification(s) or re-enactment thereof for the time being in force), read with Schedule V to the Companies Act, 2013 and Articles of Association of the Company approval of the Company be and is hereby accorded to pay a remuneration of ` ______________/- (Rupees _______________only) per annum to Mr. _____________, Managing Director of the Company, the details of which are given in the Explanatory Statement annexed hereto.

FURTHER RESOLVED THAT the consent of the shareholders of the Company be and is hereby also accorded that where in any financial year the Company has no profits or inadequate profits then remuneration as decided above be paid with the prior approval of the Central Government.

FURTHER RESOLVED THAT the Board of Directors of the Company or any committee thereof be and is hereby authorized to do all such acts, deeds and things as in its absolute discretion it may think necessary, expedient or desirable; to settle any question or doubt that may arise in relation thereto in order to give effect to the foregoing resolution.

FURTHER RESOLVED THAT the Board of Directors of the Company or any committee thereof be and is hereby also authorized to amend, alter, modify or otherwise vary the terms and conditions of appointment of Mr. ___________, Managing Director, including the components of the above mentioned remuneration payable to him.”

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Querist : Anonymous

Querist : Anonymous (Querist)

09 September 2014 where is the explantory statement. Pls also send me the explnatory staement format of the above resolution.

CS Mitesh Mehta

CS Mitesh Mehta (Expert)
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09 September 2014 In explanatory statement mention brief profile of appointee director, terms & conditions of apppointment, remuneration details etc.

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