21 August 2013
In company law remuneration of WTD is dependent on various factors. Like nature of company public or private, company is profit making or loss making etc. So you are requested to share few relevant details to enable members offer some help to you.
Its a public limited Company and company is profit making.
and one more query i am having, the management of the Company has decided to change the designation of whole time director to non-executive director. the said whole time director ws appointed in mid of the year as additional director and then whole time director with the consent of the shareholder in the forthcoming AGM.
Now, in this forthcoming AGM, we have to change the designation from whole time director to non executive.
Kindly help me out with its procedure and formalities. its for listed co.
31 July 2024
To change the designation of a Whole Time Director (WTD) to a Non-Executive Director (NED) in a listed public limited company, the following steps should be taken, ensuring compliance with the Companies Act, 2013, and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015:
### Steps and Procedure:
1. **Board Meeting**: - **Convene a Board Meeting**: Issue a notice to all directors to convene a board meeting. - **Pass Board Resolution**: Pass a resolution to recommend the change in designation of the Whole Time Director to Non-Executive Director and to include this item in the agenda of the forthcoming AGM. - **Draft Notice of AGM**: Approve the notice for the AGM, including the resolution for the change in designation.
2. **Notice of AGM**: - **Issue AGM Notice**: Send the notice of the AGM to all shareholders, directors, auditors, and other stakeholders. The notice should include an explanatory statement under Section 102 of the Companies Act, 2013, detailing the rationale behind the change in designation.
3. **Filing with Stock Exchanges**: - **Intimate Stock Exchanges**: Notify the stock exchanges where the company's shares are listed about the proposed change in designation and the AGM notice, in compliance with SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.
4. **Annual General Meeting (AGM)**: - **Hold the AGM**: Conduct the AGM on the scheduled date. - **Pass Shareholders' Resolution**: Pass an ordinary resolution for the change in designation of the director from Whole Time Director to Non-Executive Director.
5. **Post-AGM Compliance**: - **File Forms with ROC**: - **Form DIR-12**: File Form DIR-12 with the Registrar of Companies (ROC) within 30 days of the AGM, intimating the change in designation of the director. Attach the certified true copy of the AGM resolution and notice of the AGM. - **Form MGT-14**: File Form MGT-14 with the ROC within 30 days of passing the resolution, attaching a certified copy of the board resolution and the explanatory statement.
6. **Update Registers and Records**: - **Update Statutory Registers**: Update the statutory registers, such as the Register of Directors and Key Managerial Personnel, with the new designation of the director. - **Corporate Records**: Update the company's records and website with the new designation.
### Draft Resolutions:
#### Board Resolution: ```markdown RESOLVED THAT pursuant to the provisions of the Companies Act, 2013 and the Articles of Association of the company, the consent of the Board be and is hereby accorded to recommend the change in designation of Mr. [Director’s Name], from Whole Time Director to Non-Executive Director, subject to the approval of the shareholders at the forthcoming Annual General Meeting (AGM).
RESOLVED FURTHER THAT the Company Secretary be and is hereby authorized to issue the notice of the AGM and take all necessary steps to give effect to the above resolution. ```
#### Shareholders' Resolution (Ordinary Resolution): ```markdown RESOLVED THAT pursuant to the provisions of the Companies Act, 2013 and other applicable provisions, if any, (including any statutory modification(s) or re-enactment thereof, for the time being in force), and as per the recommendation of the Board of Directors, the consent of the shareholders be and is hereby accorded to change the designation of Mr. [Director’s Name] from Whole Time Director to Non-Executive Director of the company with effect from [effective date].
RESOLVED FURTHER THAT the Board of Directors be and are hereby authorized to do all such acts, deeds, matters, and things as may be deemed necessary, proper, or expedient to give effect to this resolution. ```
### Additional Considerations:
- **Contracts and Remuneration**: Review and, if necessary, amend any existing contracts, including remuneration agreements, with the director to reflect the change in designation. - **SEBI Compliance**: Ensure compliance with any additional SEBI regulations regarding the change in key managerial personnel for listed companies.
By following these steps and ensuring all necessary compliance requirements are met, the company can effectively change the designation of the Whole Time Director to Non-Executive Director.
CAclubindia
