A private limited company wish to amend its Articles towards "Directors Qualification Shares" (Note : Section 270 is not applicable to private limited companies. However the company wish to amend the Article due to the condition levied by a financial institution while granting term loan)
I give below the proposed ARTICLE which is to be brought into the Articles of Association of the Company. I request the expert members to advise whether the said Article will be in compliance with the provisions of the Act. Please note that eventhough the financial institution has levied this condition it has not specified the number of shares to be held by the directors as minimum qualification shares. Hence I propose to keep the number of shares open which shall be decided by the board from time to time in accordance with the law. The following Article has been drafted keeping the above in mind.
"THE DIRECTORS OF THE COMPANY SHALL HOLD QUALIFICATION SHARES IN THE CAPITAL OF THE COMPANY AS MAY BE SPECIFIED AND DECIDED BY THE BOARD OF DIRECTORS FROM TIME TO TIME IN ACCORDANCE WITH THE PROVISIONS OF THE COMPANIES ACT, 1956."
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