What is the meaning of whole Time Director

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

13 March 2010 In the month of feb, I have been appointed a Whole Time Director of my company .The required DIN formalities have been completed.
I would like to known what is the meaning of whole time director and what are the benefits as per company laws. Whether I have a say in the company's board & am i elegible in the shares of the company.

Jagruti (CS)

Jagruti (CS) (Expert)
Follow

15 March 2010 Term 'Whole time Director is only explained in para explanation in Section 269 of the Companies ACt, 1956.

Thus it means Director who is in employment or who devotes his whole time in the management of the Company business unlike non executive director who may renders expert services to the Company.

Whole time Director may get salary for his Service rendered if Board of Directors as well as by the Members approve the same.

Regarding Shares, you are eligible if article provide for the qualification shares or under ESOS Sceheme if Company decides; otherwise there is no special right to WTD to get the shares of the Company.

While in the Company Board, you do not have any special right. Just its on you how you can convince your Board for decision and other management work.

CS REMESH B

CS REMESH B (Expert)
Follow

15 March 2010 Whole time Director means a director employed to devote the whole of his time and attention in the carrying on of the affairs of the Co. In other words he cannot be an employee of another co., or elsewhere or do other business etc. But he can be ordinary director in other companies.

An ordinary director attends the Board meeting and does not involve in the day to day activities of the Co. But a WTD is a managerial level employee cum director. He draws salary for his work. For eg. if a person is appointed as WTD (HR) means he looks after the HR functions of the Co, and a Director of the Co. also. Designation of the WTD may be Executive Director in some companies. In normal case the Board resolution appointing the WTD describes his functions or there will be a separate agreement.
It is not clear your co. is a public ltd co. or pvt. co. Because in public co. appointment of a WTD requires filing of form 25C besides Form 32. There are remuneration limits in a public co. In certain cases appointment of WTD in a public co. requires approval from Central Govt. also! If your co. is a pvt co. such provisions are not applicable.
You have the right to attend and vote at Board Meeting .( This right is same for an ordinary director too. WTD does not have any extra power/right in Board Meeting). Eligibility of shares depends upon the Articles of Association of your Co. Please ensure that your designation shown was Whole-time Director in Form 32 filed with ROC.

Upgrade to CAclubindia Pro. Subscribe Now!