04 March 2011
Facts: A is a WTD in Public Ltd. listed Company and it is proposed to appoint him as MD in subsidiary company i.e. Private Ltd subsidiary of public ltd.
Query: Whether is it possible to appoint WTD as MD in subsidiary company?
04 March 2011
In my opinion, Since Mr. A is already a WTD of A Ltd., it means that he is devoting his entire time and energy as a Director of A Ltd. As per the definition provided under section 2(26) a Managing Director is a Director who has been entrusted with substantial powers of managin the affairs of the Company.
So, to be appointed as MD of a Company, a Director will be required to devote all his time and energy which is not possible if he is already a WTD of a Public Listed Company.
This is my opinion and experts please share ur opinion on the above query and is there any violation of the Companies Act, 1956 if we go ahead with the appointment??????
CAclubindia
