In a listed company a MD is re-appointed whose tenure expires on 31.03.2010 at the board meeting held at 27.05.2010,and the effective date of re-appointment is form 01.04.2010.Is is possible.
Further when I have filed Form 25c and i am asked to filed the clarification as to how the effective date be prior to date of board meeting.
A company can not appoint a managing director or whole time director retrospectively. As per your queries, it is required to hold a board meeting before the expiry of tenure of managing director other wise the company will be treated as not complied the provision of section 269.
Section 302 is a very tuff section, which indirectly said that the general meeting will be called with in time and abstract of the terms and condition will be send to the members of the company with 21 days of the appointment of managing director, whole time director or manager. Sub section (7) of the said section also said that the provision of the said section will also apply to the resolution passed by the board of director for the appointment of MD or WTD or manager.
As per my suggestion to you that you appoint a MD at a board meeting before the expiry of tenure of MD and comply the provisions of section 302 as and when you will call a general meeting.
Other view/suggestion will also be solicited. Regards CS Ajay Mishra
Re-appointment of Managing Director in a public company can be done by board meeting resolution subject to the approval of shareholders in a General Meeting.
For example if the term of your Managing Director expires on 31.03.2010 there is no need to worry at all. Simply pass a board resolution before 31.03.2010 subject to the approval of members in the general meeting and confirm the appointment in next General Meeting held immediately after his/her appointment by the board.
File all the necessary ROC forms (form 23 and form 25C) from the date of board resolution. Nothing is to be filed after General Meeting for confirmation as far as re-appointment of Managing Director is concerned. Remember one thing retrospective re-appointment of Managing Director is not possible due to section 317 hence passing of Board Resolution subject to the approval of members before 31.03.2010 is mandatory.
As per DCA clarification the above practice is very much possible. Find below the extract of DCA clarification:
As per circular number 2/94 dated 10 February 1994— Managing Director may initially be appointed by a board resolution subject to the approval of members in the general meeting and such approval may be obtained in the first general meeting of the company held immediately after his appointment by the board.
E-form filing with ROC:
1. Form-25C/25A, as the case may be, under section 269 within 90 days from the date of passing of board resolution.
2. Form-23 under section 192(4)(c) within 30 days of passing board resolution.
Form-32 is not required in case of re-appointment of Managing Director as there is no change composition in board of directors involved.
For my detailed reply kindly go through the link below:
Further my query is that the MD is reappointed along with revision in his remuneration on the board meeting held on 27.05.2010 effective date of reappointment is 01.04.2010 and re-appointed is approved in the agm held on 31.08.2010. The previous tenure expires on 31.03.2010.
As the company has defaulted in appointing a MD, because the company can not appoint MD retrospectively. Your company appointed him on BM which was held on 27.05.10 with effect from 01.04.2010, which are not possible.
I am giving u an example, how the Act prohibit appointment of MD/WTD retrospectively:
Suppose the period of MD expire on 31.03.2010 and the Board Meeting of the company is held on 14.07.2010 for re-appointment with effect from 01.04.2010 and in that case how you file form 25C with ROC because the Form-25C is to be filed with in 90 days from the date of appointment and in that case the period of 90 days expire before the date of BM.
In that case company is requirede to appoin MD before the expire of his tenure.
In case of remuneration, you can pay remuneration retrospectively, i.e. from 01.04.2010.
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