Re - appointment of managing director

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

14 March 2012 Our Company wants to Re-appoint Managing Director, whose tenure of services comes to end on 31.03.2012. In this matter Chairman and one director of company are interested. Now our question is in this particular situation whether we have to send abstract and memorandum of concern or interest under section 302 of the Companies Act, 1956 to members or not. While studying this matter we examine the cases of some companies in which we found some companies send the said abstract and some complied this with notice of AGM. The said appointment is falls within the purview of Schedule XIII of the companies Act.

Ajay Mishra

Ajay Mishra (Expert)
Follow

14 March 2012 Hi

If a director is interested whether directly or indirectly in the appointment of managing director, the company shall send an abstract of the terms of appointment/contract or variation thereof, together with a memorandum specifying the nature if interest or concern of the director, to every member of the company with in 21 days of entering or varying the contract of appointment or passing of Board Resolution in regard to. Invariably the MD is appointed from among the directors. As such the requirements of section 302 has to be complied with as and when a MD or WTD is appointed.

All contracts entered into by company for the appointment of MD shall be kept at the registered office of the company and shall be open for inspection of any member of the company under section 163.

Regards

Guest

Guest (Expert)

14 March 2012 Notice sent to members itself can be considered as abstract u/s 302 if mentioned in explanatory statement accompning notice. No need to send it seperately.

Regards

Upgrade to CAclubindia Pro. Subscribe Now!