Appointment of MD

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

28 October 2010 HI,

Please guide me the process of appointment of MD in Pvt. Ltd. co, if the person is already director of that company.

Which resolution will be passed and in which meeting ?
What all forms are required to be filed with RoC ?
please provide me the Resolution rquired.

CS Nikita Sheth

CS Nikita Sheth (Expert)
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28 October 2010 Hi

First of all you have to check the AOA whether any specific provisions are there for the appointment of MD?

If no then,have a consent letter of that Director to become MD and then prepare agreement for his appointment.

Its required Board Resolution

File only form 23 for Board Resolution

and lastly file Form 32 for appointment/ change in designation of Director

Ajay Mishra

Ajay Mishra (Expert)
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28 October 2010 Hi

PROCEDURE FOR APPOINTMENT OF WTD/MANAGING DIRECTOR

1. Aboard Meeting shall be convened to decide on the proposal to appoint a particular person as a managing director and also decide provisionally the terms and conditions of the appointment including the remuneration if any, payable to the managing director.
2. The Board decide whether the remuneration payable to MD would be by way of monthly payment or at a specified percentage of the net profit of the company or partly by the one way or partly by the other.
3. A copy of the Board Resolution regarding the appointment should be filed with the ROC in Form-23 within 30 days from the date of passing of such resolution.{ Section 192(1) read with Section 195(4)(c)}.
4. If the appointment is in conformity with the provision of Schedule XIII, a return in Form-25 C must be filed with in 90 days from the appointment with ROC.
5. If the appointment is not in conformity with the procedures of Schedule XIII, approval of the Central Government is required, in the following manner:

a. before any application is made by the company to CG, there shall be issued by or on behalf of the company a general notice to all members indicating the nature of the application proposed to be made.
b. The notice is to be published at least once in a regional language newspaper and once in an English newspaper circulating in the district where the registered office of the company is situated. {Section 640B}.
c. An application shall be made to CG in Form-25A within 90 days from the date of appointment, together with the fee as per Companies (Fee on Applications) Rules, 1999.
d. A copy of the application along with all document (except fees) shall also be forwarded to the ROC.
e. In case the appointment is made without remuneration, CG approval’s will still be necessary if the appointment falls outside the provisions of Part I of Schedule XIII.

6. The appointment and remuneration payable to MD require approval of the Shareholders by Ordinary Resolution.{Clause I of Part III of Schedule XIII}.
7. The terms and conditions of the appointment of MD should be incorporated in an agreement executed by him with the company.
8. An abstract of the terms of agreement for the appointment of the MD should be sent to every member of the company within 21 days of entering into agreement.

Best Regards

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Ankur Garg

Ankur Garg (Expert)
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29 October 2010 Agree with Expert Nikita...

Section 269 and schedule XIII is not applicable to your private company.

Simply pass a board resolution for appointment and file form 23 and form 32 within 30 days of board meeting.

Regards