Regulariation of Additional Directors

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

11 April 2011 There are thre directors in a private company who were appointed as additional directors last year and now in the coming AGM we want to regularise them.

How do we do that and do we need to mention this item as special business in the NOTICE of the AGM??

Thanks in advance

Regards

CS Jignesh Mistry

CS Jignesh Mistry (Expert)
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11 April 2011 No need to have special business.
under ordinary business you have to state their names & other details for appointment.

udit sharma

udit sharma (Expert)
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11 April 2011 I disagree with the expert!

In case of an Independent Private Company, no need to appoint Additional Directors and then regularise them at the ensuing AGM of the Company. You could have directly inducted them as Directors on the BOD.

In case of a Private Company which is a subsidiary of a Public Company, pursuant to the provisions of Section 260 of the Companies Act, 1956, the BOD if authorised by the AOA may appoint Additional Directors to hold the office as such till the conclusion of ensuing Annual General Meeting.

If all the Directors are Additional Directors, who will be liable to retire by rotation at the ensuing AGM of the Company as the provisions of Section 255 are applicable to a Private Company which is a subsidiary of a Public Company?

In my opinion, u should convene an EGM before the AGM to regualrise the Additonal Directors.

Secondly, regularisation of Additional Directors will fall under 'Special Business'at the AGM of the Company.

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Jayashree S Iyer

Jayashree S Iyer (Expert)
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12 April 2011 There is no need for EGM to regularise the additional directors.

Regularation of additional directors can be taken up in the next AGM. The business will be special and the resolution required will be ordinary. In case of AGM, all business to be transacted shall be special with the exception of those stated in Section 173(1).

However these directors have to propose their candidature and get them elected as Directors as per section 257 of the companies act, 1956.

udit sharma

udit sharma (Expert)
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13 April 2011 Jayashree mam

Kindly let me know that since all the 3 Directors are Additional Directors, which Director will retire by rotation at the ensuing AGM?

Jayashree S Iyer

Jayashree S Iyer (Expert)
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19 April 2011 Dear Udit,

In case of additional directors there is no question of retirement by rotation. They will automatically vacate the office after the AGM, unless elected as director in the AGM.

For appointment as director in the AGM, as per Section 257 he shall offer his candidature along with a fee of Rs.500/- and on passing of resolution by members in the AGM electing him as a director, he becomes a regular director.