Section 257 says that a person can be appointed other than retiring director. So the period of additional director expire on AGM, so it will be good, if we regularise him before the end of his tenure.
28 November 2012
i) Where the directors have not filled the vacancies or ii) Directors are not able to appoint because there is a deadlock in the board or iii)There is no validly appointed director in office.
Yes, General meeting has no power to appoint additional director.It is open to the Board of directors to appoint additional director if power has been conferred on the Board by the Articles of Association, irrespective of the provisions of section 255, 258, & 259 of the Companies Act. The additional director so co-opted shall hold office only upto the date of the next AGM. The co-option of an additional director in terms of the first proviso to section 260 ceases unless re-appointed on the last day of the next AGM that should have been held. The word 'shall hold office only upto the date of next AGM' mean that such director shall hold office upto the last date on which the next AGM should have been held and not the actual holding of that meeting if it is beyond the statutory period for holding of such meeting. [Dushyant D. Anjaria v Wall Street Finance Ltd. (2001) 105 Comp Cas 655 (Bom)]
28 November 2012
Appointment of additional director needs to be appointed as ordinary director at the next annual general meeting
Since the Board may appoint an additional director to hold office till the date of the next annual general meeting, his appointment needs to be appointed as a normal director by way of an ordinary resolution as a special business at the annual general meeting. (Specimen of resolution at the annual general meeting has been given in Appendix 3) The provision for an additional director is one which is meant to enable the companies to have the benefit of the services of a person, who otherwise is suitable for serving on the Board, and whose presence in the Board is desirable in the interests of the company till upto the time the next AGM is held. That provision is not meant to enable the company to keep on its Board a person as additional director for an indefinite period of time by not holding the annual general meeting. Section 260, therefore, must necessarily be read with section 166 which stipulates that the AGM be held every year and not more than fifteenth months shall elapse between the date of one AGM and the next. [P. Natranjan v Central Government (2004) 60 CLA 274 (Mad)]. e-Form 32 for change in the designation of director should be filed by the Company electronically to the Registrar within 30 days from the date of general meeting.
It is sole power of board to appoint director before the AGM under section 260, 262 & 313 and if the Shareholders apopint the director it would be under section 257 and above section would not apply.
So the concept is very clear. Additional Director can only be appointed by the Board of Directors in Board Meeting.
28 November 2012
Even additional director may be appointed by only 1 director, under Table A, where the number of director reduced to 1 only, to fulfill the quorum only.
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