06 September 2012
A private company hired an experienced person for using his experience in the operations of company and wants to give him the designation "Director-Operations". this designation will be printed on his visiting card and on every future correspondence he would made on behalf of company.
Can company do so without legal formalities of Companies Act?
Guest
Guest
(Expert)
06 September 2012
Yes, company can do so. There are no hassles. Go ahead without worry. There are no formalities in companies act.
I beg to differ with Ms. Neha. If you disign somebody as Director, without actually making him a member of the board, then wrong impression may be created in the mind of others and may treat the same person as a member of the Board.
Department of Company Affairs Circular No.2/1982(1/1/82-CL-V;23/44/79-CL-II) dated 20th January, 1993 regarding appointment of persons styled as special directors, executive directors, etc.was mentioned that Instances have come to the notice of the Department where companies have designated executives who are not members of the Board as special director, director administration, etc. Such designations give an impression to public at large and those dealing with these companies and the executives that they are full-fledged directors entitled to act as such on behalf of the companies. If in fact these executives are not directors on the board of the companies, it will be patently wrong on the part of companies to designate them as directors.
Obviously form 32 will be filed for appointing as director but then what I am emphasizing is there are no formalities for using the designation as director- operations.
CAclubindia
