Section 269
This query is : Resolved
16 April 2012
Facts of the Case:
• Mr. A has been appointed as MD of ABC Ltd for a period of 5 years without drawing any remuneration.
• Mr. A is an employee of PQR Ltd.
• It is proposed to appoint Mr. A as Director of PQR Ltd.
• By virtue of provisions contained in Section 269 of the Companies Act, 1956 Mr. A shall be deemed to be Whole Time Director of PQR Ltd.
• Pursuant to his appointment as Whole Time Director of PQR Ltd, can Mr. A continue as MD of ABC Ltd.?
Regards
CS Udit Sharma
• Mr. A has been appointed as MD of ABC Ltd for a period of 5 years without drawing any remuneration.
• Mr. A is an employee of PQR Ltd.
• It is proposed to appoint Mr. A as Director of PQR Ltd.
• By virtue of provisions contained in Section 269 of the Companies Act, 1956 Mr. A shall be deemed to be Whole Time Director of PQR Ltd.
• Pursuant to his appointment as Whole Time Director of PQR Ltd, can Mr. A continue as MD of ABC Ltd.?
Regards
CS Udit Sharma
16 April 2012
Yes he can continue as MD of ABG Ltd as well.
Restriction is there only if he is appointed as MD or Manager of PQR Ltd.
As in your case he is getting appointed as WTD, normal procedure for appointment of WTD is to be followed.
Restriction is there only if he is appointed as MD or Manager of PQR Ltd.
As in your case he is getting appointed as WTD, normal procedure for appointment of WTD is to be followed.
17 April 2012
Dear Jagruti!
Thanks for ur reply.....but can u please elaborate ur answer citing some case laws or relevant provisions of the Companies Act, 1956?
Thanks for ur reply.....but can u please elaborate ur answer citing some case laws or relevant provisions of the Companies Act, 1956?
21 April 2012
In My opinion a person can't be appointed as a MD if he is WTD in another company.
Though the companies act does not expressly prohibit it.
The logic behind in my answer is that WTD is one who spends his whole time in the management of the company. MD also stands in the same position.
Though Act permits appointment of same person as MD of more than one company. About WTD, its is not expressly mentioned.
Though the companies act does not expressly prohibit it.
The logic behind in my answer is that WTD is one who spends his whole time in the management of the company. MD also stands in the same position.
Though Act permits appointment of same person as MD of more than one company. About WTD, its is not expressly mentioned.
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