14 February 2011
It's not mandatory for a private limited company to appoint a Managing or Whole Time Director. Hence subject to the provisions of Aricles, the appointment of MD can be made by Board. Similarly the Chairman can also be appointed by the Board.
As per the provisions of section 302 of the Companies Act, 1956 when a Company enters into a contract for the appointment of a MD or varies any terms of appointment, the Company shall within 21 days from the date of entering into a contract send an abstract containing brief terms of appointment of MD to the shareholders and if any Director of the Company is interested in such contract, a memorandum along with the abstract stating the interest of the concerned Director is tobe sent tothe shareholders. Hence when a Company enters into a contract for appointment of MD, notice has to be given as per section 302 of the Companies Act, 1956.
In case of appointment of Chairman of the Board, if he is to preside at the General Meeting of the Company, then as a prudent practice notice should be given but not a mandatory compliance to give any such notice in case of change in the Chairman of the BOD.
As per the provisions of section 302 of the Companies Act, 1956 when a Company enters into a contract for the appointment of a MD or varies any terms of appointment, the Company shall within 21 days from the date of entering into a contract send an abstract containing brief terms of appointment of MD to the shareholders and if any Director of the Company is interested in such contract, a memorandum along with the abstract stating the interest of the concerned Director is tobe sent tothe shareholders. Hence when a Company enters into a contract for appointment of MD, notice has to be given as per section 302 of the Companies Act, 1956.
In case of appointment of Chairman of the Board, if he is to preside at the General Meeting of the Company, then as a prudent practice notice should be given but not a mandatory compliance to give any such notice in case of change in the Chairman of the BOD.
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