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Additional Director

Ashish Sharma (Service) (1028 Points)

26 October 2010

Hi,

In a Private Limited Co. an Additional Director(Independent) appointed on 1/10/2010 form 32 filled, total Directors are three one of them resigned after appointment of additional director.no form 32 filled for resignation. Now my questions are

1. Is there any problem if in private limited One director is Independent and other is executive?

2. on the next AGM what are the procedure to appoint additonal director as a regular director?

3. Is the form 32 is necessary to fill in case of private limited companies?

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7 Replies

Ankur Garg (Company Secretary and Compliance Officer) (114773 Points)
Replied 26 October 2010

1. No there is no problem as far as independent, executive or non-executive director is concerned.

2. Procedure for regularisation---you have to re-appoint him in the next AGM through passing an ordinary resolution of shareholders. File form 32 within 30 days of AGM for change in designation.

3. Yes form 32 is necessary in case of pvt. Co. Private companies r not exempt from filing of form 32.

Thanks

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Ajay Mishra (Company Secretary) (74337 Points)
Replied 26 October 2010

In a private limited company not compulsory to have independent director.

In case of regularization of additional director, I will suggest you to regularize such director in any general meeting before AGM and file Form 32 for change in position of director with ROC within 30 days from the date of regularization.

Regards

Yogesh Shah (Managing Corporate Finance) (1051 Points)
Replied 26 October 2010

Hi Mr. Ajay,

With due respect to your answer, I have one doubt. As far as I have read in Law book, additional director shall hold office only upto the date of next AGM. Hence, in case of regularisation of him, AGM is relevant.

You have told in your answer that in EGM before the AGM, such additional director needs to be regularised. IS IT POSSIBLE?

Ajay Mishra (Company Secretary) (74337 Points)
Replied 26 October 2010

Dear Mr.Yogesh

Section 260 defines the maximum tenure of additional director upto the AGM. So if you want to regularise such additional director, there is no need to go till AGM, you can regularise him in any general meting and Companies Act does not impose any restriction for opting this practicing.

I will also suggest you to regularise your additional director in any general meeting hold before AGM and in any case no general meeting is going to be held between two AGM then regularise such director on AGM.

Regards

Ankur Garg (Company Secretary and Compliance Officer) (114773 Points)
Replied 26 October 2010

Originally posted by : Yogesh Shah
	Hi Mr. Ajay, With due respect to your answer, I have one doubt. As far as I have read in Law book, additional director shall hold office only upto the date of next AGM. Hence, in case of regularisation of him, AGM is relevant. You have told in your answer that in EGM before the AGM, such additional director needs to be regularised. IS IT POSSIBLE?

Dear Sir there is no doubt about the observation of Mr. Ajay. Reason being section 260 is all about AGM and fixing the maximum tenure of additional director.

However for regularisation of additional director we have to follow section 257 which is all about appointment in GM and doesn’t restrict itself to any AGM or EGM.

So if you appoint or regularize additional director in an EGM u/s 257 before AGM the same would be in compliance with section 260 and 257. Remember section 260 is just fixing the maximum tenure of additional director and doesn’t restrict an early regularisaton in a GM.

Hope this would be enough for removal of all your doubts

Thanks

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Yogesh Shah (Managing Corporate Finance) (1051 Points)
Replied 26 October 2010

Yes ... I got it. Now, no doubt.

Thanks to both seniors.

sai swaroop munaga (Asst.Manager - Accounts & Finance) (194 Points)
Replied 26 October 2010

1. No there is no problem as far as independent, executive or non-executive director is concerned.

2. Procedure for regularisation---you have to re-appoint him in the next AGM through passing an ordinary resolution of shareholders. File form 32 within 30 days of AGM for change in designation.

3. Yes form 32 is necessary in case of pvt. Co. Private companies r not exempt from filing of form 32.