Number of managing directors

This query is : Resolved

Report Abuse Follow Query Ask a Query

Querist : Anonymous

Querist : Anonymous (Querist)

02 January 2013 Can a company have more than 1 Managing Director?

Querist : Anonymous

Querist : Anonymous (Querist)

02 January 2013 Searching for the same

KCJM and Associates

KCJM and Associates (Expert)
Follow

02 January 2013 Yes, a company can have more than one Managing Director. The Managing Director of a Company is defined by Section 2 (26) of the Companies Act, 1956 as “…means a director who, by virtue of an agreement with the Company or of a resolution passed by the company in general meeting or by its Board of Directors or, by virtue of its memorandum or articles of association, is entrusted with [substantial powers of management] which would not otherwise be exercisable by him….” . . Hence there can be more than one managing director for a company. According to Section 197A of the Act, a company cannot have at the same time a MD and a Manager. A company may, however, at the same time, appoint or employ two or more MDs.

Upgrade to CAclubindia Pro. Subscribe Now!

Ajay Mishra

Ajay Mishra (Expert)
Follow

02 January 2013 Hi

company can have more than one Managing Director. The Managing Director of a Company is defined by Section 2 (26) of the Companies Act, 1956 as “…means a director who, by virtue of an agreement with the Company or of a resolution passed by the company in general meeting or by its Board of Directors or, by virtue of its memorandum or articles of association, is entrusted with [substantial powers of management] which would not otherwise be exercisable by him….” . Though the Companies Act does not expressly mention that there can be more than one managing director for a company, in Section 5 of the Act which deals with officers in default, it states in clause (a) to the section “managing director or managing directors”. Hence there can be more than one managing director for a company. According to Section 197A of the Act, a company cannot have at the same time a MD and a Manager. A company may, however, at the same time, appoint or employ two or more MDs.

Department's Clarification-"Section 2(26) defines "Managing director" as a director who is entrusted with substantial powers of management which term refers to the nature of the powers and not the quantum thereof. Section 2(24) of the Companies Act, 1956, on the other hand has defined the word manager' as an individual who has the management of the whole or substantially the whole of the affairs of a company. Thus the managing director of a company may be entrusted with substantial power of management but not necessarily of the whole or substantially the whole of the affairs of a company. A company may, therefore, have more than one managing director. [Department's Clarification F. No. 8/16/(1)/61-PR].

Querist : Anonymous

Querist : Anonymous (Querist)

03 January 2013 Thanks for giving the answer with Departmental Clarification. Can u help me on one my query relating to TCS.

Ajay Mishra

Ajay Mishra (Expert)
Follow

03 January 2013 TCS.........?

Querist : Anonymous

Querist : Anonymous (Querist)

03 January 2013 TCS is to be collected on what amount, i.e., whether on the bill amount including VAT or excluding VAT?? For ino resale the same. The person sales @ RS.1000 and VAT Rs.stance, if the seller sales tree to be person, who is t50 thereon. Hence, total bill amounts to Rs.1050. Now, w?hether the seller has to collect tax on Rs.1000 or Rs.1050

Read more at: https://www.caclubindia.com/experts/modify_message.asp?entry_id=581031