22 April 2016
Dear Experts,
Kindly clarify the following doubts in company law.
1. The Articles of association of a company provide that dividend can be declared at an Extraordinary general meeting. Whether it is valid?
2. Can a person be appointed as Managing director of more than one Company?
3. Can a MD of a company be a Manager of another company also?
4. Whether the following is correct?
Foreign company has opened an office for operating bank accounts in India. Hence, it is supposed to carry on business in India
22 April 2016
1. If the Articles of a company permits the declaration of dividend at an extraordinary general meeting, it will not be considered ultra vires. A company which could not declare a dividend at an annual general meeting can declare dividend at the ensuing general meeting. But if a company had declared final dividend at an annual general meeting, the company cannot declare further dividend for the same year. 2. No public company or private company which is a subsidiary of a public company can, appoint or employ any person as managing director, of he is either the managing director or the manager of any other company, except as provided below. A public company or a private company which is the subsidiary of a public company may appoint or employ a person as its managing director, if he is the managing director or manager of one, and of not more than one, other company provided that such appointment or employment is made or approved by a unanimous resolution passed at a meeting of the Board and of which meeting, and of the resolution to be moved thereat, specific notice has been given to all the directors then in India. In addition to the above provision, the Central Government may, by order, permit any person to be appointed as a managing direct of more than two companies if the Central Government is satisfied that it is necessary that the companies should, for their proper working, function as a single unit and have a common managing director. 3. No 4. Yes
CAclubindia
