Company having only additional directors

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

23 June 2012 Dear All,

A ltd company was incorporated in April, 2011 having 3 directors.

Later on two directors were appointed as additional directors in November, 2011. Following which two earlier directors resigned.

The company was left with one normal director and two additional directors.

Now in February, 2012, again one director was appointed as additional director, following which the normal director resigned from his office.

Now the company is left with 3 additional directors. Is this correct to have only additional directors.

What should be done now. The company being a limited company has also not held the statutory meeting within 6 months from incorporation.

Please help...

CA Hardik Bunha

CA Hardik Bunha (Expert)
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23 June 2012 A company will appoint additional director to the extent fixed by ARTICLES OF ASSOCIATION.

Hence total number of director and additional director shall not exceed the limit fixed by AOA.

If this limit exceed approval of central government is compulsary.

This critaria is applicable to both public and private company.

Querist : Anonymous

Querist : Anonymous (Querist)

23 June 2012 My question is that, can the company have only additional directors on its board.

Since now in the coming agm which shall be the company's first agm, all the three additional directors will retire.

What should be done. What should be my future course of action for the company so as to ensure compliance in all aspects.

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CS SIDDHARTHA BANIK

CS SIDDHARTHA BANIK (Expert)
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23 June 2012 Additional Director is also a Director. Section 260 of the Companies Act empower BOD to appoint AD , to hold office upto the date of next AGM. In the AGM they can seek re-appointment.Follow the provision of Sec 257. Shareholders may consider their appointment and may reappoint them.

Therefore I do’t find any problem in your case.

Thanks,

Querist : Anonymous

Querist : Anonymous (Querist)

25 June 2012 But section 257, talks about a person appointed as director other than the retiring director, under which proposal shall be made two ways:
1) by the person standing for directorship,
2) by a member proposing him.

Now in the coming agm can all the three additional directors, propose to regularize themselves.

Will the agenda of the meeting include the regularization of the additional directors. I think a regular director should be there in order to regularize them.

Plz reply.

Ajay Mishra

Ajay Mishra (Expert)
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25 June 2012 Hi

I will suggest you to conduct an EGM to regularize additional director as director before holding AGM as a good corporate practice you should regularise additional director as director before end of his tenure.

You should hold statutory meeting with in time period specified under section 165 of the Companies Act, 1956.

Regards

Querist : Anonymous

Querist : Anonymous (Querist)

25 June 2012 Thanks a lot.