I am appointing sleeping director to my company where in he is only investing and having no hold on company other than percentage of net profit. Kindly help me in making legal documents and appointment letter.
06 June 2010
There is no concept like sleeping director in the eyes of law. I understand that this person would be only designated as a director. He would not be holding any shares in the company. He will not be taking any decisions. He will only get sitting fees for attending board meetings.
In such case, the person has to be appointed by the board as a director (additional director) and then regularised at the AGM. No legal document other than his consent letter is required.
06 June 2010
Post such appointment, Form 32 has to be filed with the ROC.
If the company is not a private limited company, then, in case profit is to be shared, then max only 1% of net profits computed in accordance with sec 349 & 350 may be shared. If fixed remuneration is given, then central government's approval is required.
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