Section 196 of ca 2013

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Querist : Anonymous

Querist : Anonymous (Querist)

04 July 2014 According to Section 196 of Companies Act, 2013 Managing Director of all companies can be appointed only for a term of five years . Earlier this [provision was not applicable to private companies. in that case the period of managing director for five years will counted from 1 April 2014 ( Applicability of THIS SECTION) or before that ?

Ankur Garg

Ankur Garg (Expert)
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05 July 2014 Appointment of Managing Director is not compulsory for Private Company as section 203 is not applicable on Private Company. Still if Private Company appoints MD then such Private Company shall be governed by the provisions of section 196.

There is no compulsion to fix the term from 01.04.2014. Whenever you appoint MD through board resolution, you may fix his term form next 5 years starting from the date of board meeting.

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Querist : Anonymous

Querist : Anonymous (Querist)

09 July 2014 Thanks for your reply sir. in case of our company MD was appointed in year 1984 and his term was not fixed . Now as section 196 of CA 2013 has now become applicable for private companies we can appoint MD only for five years. Shall we have to pass a Board resolution stating his term for five years starting from 1 April 2014 or will it be counted earlier from 1st April 2013 . Please guide.

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Querist : Anonymous

Querist : Anonymous (Querist)