Wtd + md

This query is : Resolved

Manisha (Querist)
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22 September 2011 Dear All,

As per Cos Act, a person can be appointed as a Whole Time Director in only one company at most whereas a person can be appointed as a Managing director in 2 companies.

I could not come across any section relating to an individual's appointment as a WTD in one co and MD in another.
I wish to know whether one person say MR.A can be appointed as WTD in Co. X ltd. and MD in Co. Y Ltd.

Pls reply at the earliest with reference to any case law or provision of the Act.

CS Suraj Arora

CS Suraj Arora (Expert)
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22 September 2011 Dear Manisha

The answer of the above query is clearly No.Look By the Companies Amendment Act 1960 there provision contained in section 315-317 has been altered and provides as follows:-

Read Section 316(2)....A public co.may appoint or employ a person as its managing director if he is MD/manager in not more than One company.....the draftsman here had specifically excludes whole time director deliberately not by mistakenly....when section 269,309 all includes WTD then what is the purpose here to exclude WTD....he can also include that WTD can be appointed in other company as WTD....now a person who is in whole time employment of a company how he can use substantial power in other company as MD.....now even read section 316 (2)again section says words.....may appoint or EMPLOY ...as soon as he has used word Employ at the same time the drafts man has exclude Whole time Director in the next line if he is MD/MANAGER ......means if he employ him then he come under definition of WTD....So as per your wording a WTD can not be WTD in other Co.he Only provide that the company can either employ him as MD/Manager....

in the whole section 316 the draftsman does not speak about WTD...means WTD being in whole time employment can not be appointed in some other company to use substantial powers.

cssurajarora@gmail.com

Manisha

Manisha (Querist)
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22 September 2011 Thank you Mr. Suraj,
Pls refer the following query also and qive ur opinion.
https://www.caclubindia.com/experts/appointment-of-md-of-subsidiary-as-wtd-in-parent-company-784265.asp

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Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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04 August 2023 There is no restriction in companies act regarding appointment of MD in two companies (sec 316). Unanimous resolution is required to be passed by the Board in such case and appointment in more than two company requires approval of central Govt.