Provisions relating to MD / WTD as per companies act, 2013

CS Divesh Goyal , Last updated: 21 April 2016
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SECTIONS INVOLVED:

Section 152(2): Save as otherwise expressly provided in this Act, Every Director shall be appointed by the company in general meeting.

Section 170(2): A return containing such particulars and documents as may be prescribed, of the directors and the key managerial personnel shall be filed with the Registrar within thirty days from the appointment of every director and key managerial personnel, as the case may be, and within 30 days of any change taking place.

Section 117(3)(c): A copy of resolution of the Board of Directors of a company or agreement executed by a company, relating to the appointment, re-appointment or renewal of the appointment, or variation of the terms of appointment, of a Managing Director shall be filed with the Registrar within thirty days of the passing or making thereof.

Section 161(1): The articles of a company may confer on its Board of Directors the power to appoint any person, other than a person who fails to get appointed as a director in a general meeting, as an additional director at any time who shall hold office up to the date of the next annual general meeting or the last date on which the annual general meeting should have been held, whichever is earlier

Section 196: No company shall appoint or re-appoint any person as its managing director, whole-time director or manager for a term exceeding five years at a time

Section 197: Overall Maximum Remuneration and Managerial Remuneration.

EARLIER WAS SECTION 197A, 267, 311, 317, 384, 385, 388 OF THE COMPANIES ACT, 1956

RULES INVOLVED:

Rule 3 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules,2014

Rules 17 of the Companies (Appointment and Qualification of Directors) Rules, 2014-Register of directors and key managerial personnel

Rule 18 of the Companies (Appointment and Qualification of Directors) Rules, 2014- Return containing the particulars of directors and the key managerial personnel

Rule 8 of the Companies (Appointment and Qualification of Directors) Rules, 2014- Consent to act as director.

CIRCULARS INVOLVED:

Notification No. G.S.R. 464(E) dated 5th June 2015

FORMS INVOLVED:

DIR- 12 - Particulars of appointment of Directors and the key managerial personnel and the changes among them.
MR-1 - Return of appointment of MD/WTD/Manager.
MGT– 14 -Filing of Resolutions and agreements to the Registrar
DIR- 11 – Filing of resignation with ROC by the Director.

NON APPLICABILITY:

Government Company: As per NOTIFICATION NO. GSR 463(E)[F.NO.1/2/2014-CL-V], DATED 5-6-2015 :

Section 196 Sub Section 2, 4 & 5 Not applicable on Government Company.
Section 197 not applicable on Government Company.

Private Company: As per NOTIFICATION NO. GSR 464(E) [F.NO.1/1/2014-CL-V], DATED 5-6-2015

Section 196 Sub Section 4 & 5 Not applicable on Private Company.
Section 197 not applicable on Private Company (Literal Interpretation).

DEFINITION:

Managing Director: - As per Section 2 clause 54 of Companies Act, 2013

A director who, by virtue of the articles of a company or an agreement with the company or a resolution passed in its general meeting, or by its Board of Directors, is entrusted with substantial powers of management of the affairs of the company and includes a director occupying the position of managing director, by whatevername called.

MD means a Director. As a MD or WTD must also be a director, theBoard can appoint to the office of MD/WTD only a person who is already a director.

Situation: If, for any reason such as the need of possessing professional or technical qualification, an outsider has to be appointed, the course to be followed is first to get him appointed as director either by the Board itself as an additional director under section 161 or by the Company in general meeting u/s 152 for such period as the company may determine.

Manager:-

As per Section 2 clause 53 of Companies Act, 2013

An individual who, subject to the superintendence, control and direction of the Board of Directors, has the management of the whole, or substantially the whole,of the affairs of a company, and includes a director or any other person occupying the position of a manager, by whatever name called, whether under a contract of service or not.

Whole-Time Director: - As per Section 2 clause 54 of Companies Act, 2013

A director in the whole-time employment of the company.In other words, a director employed to devote the whole of his time and attention in the carrying on of the affairs of the Company.

Whether a WTD can be director in other Companies:

That is to say he cannot also be an employee of another Company or elsewhere, or be engaged in any other business pursuit, though he may be an ordinary director of one or more other Companies also.

Executive Director: - Companies (Specification of definitions details) Rules, 2014,

2(K)Executive Director means a Whole Time Directoras defined in clause (94) of section 2 of the Act.

PURPOSE OF FILING OF FORMS:

MGT-14: This form required to file within 30 days of passing of resolution and required to file for below mentioned purposes for All The Companies including Private Limited Company {Section 117(3)(c)}.