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Appoinment of Managing Director of Private limited company

24 November 2008

As per the AOA of a Pvt Ltd Company( not a subsidiary of Public Ltd Company), The board may appoint a person as Managing Director.

Please let me know the procedure for appointing an existing Director as MD and also the matters relating to the compliance with ROC filing

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26 Replies

(Guest)

Hello there,

We have recently formed a private limited and looking for formalities / format to appoint Managing Director.

Thanks for your kindness

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Muralidharan (Self Employed) (1034 Points)
Replied 04 December 2008

At a duly convened board meeting the company can appoint a Director as Managing Director of the Company. Since the company is a private limited company there is no restriction in respect of the period of appointment. The board can fix the period of appointment. If the articles of association empowers the board, then the board can fix the remuneration of the Managing Director. Within 30 days of the board meeting the company will have to file Form 32 and Form 23 with the Registrar of Companies (at present online). Form 23 with board resolution has to be filed since it attracts the provisions of Section 192 of the companies act, 1956

Muralidharan

1 Like

pravin (cs-final) (44 Points)
Replied 07 September 2009

whether provision of AOA is required to appoint managing director in case of private limited company

Ajay Mishra (Company Secretary) (74342 Points)
Replied 07 September 2009

PROCEDURE FOR APPOINTMENT OF MANAGING DIRECTOR

Aboard Meeting shall be convened to decide on the proposal to appoint a particular person as a managing director and also decide provisionally the terms and conditions of the appointment including the remuneration if any, payable to the managing director.
The Board decide whether the remuneration payable to MD would be by way of monthly payment or at a specified percentage of the net profit of the company or partly by the one way or partly by the other.
A copy of the Board Resolution regarding the appointment should be filed with the ROC in Form-23 within 30 days from the date of passing of such resolution.{ Section 192(1) read with Section 195(4)(c)}.
If the appointment is in conformity with the provision of Schedule XIII, a return in Form-25 C must be filed with in 90 days from the appointment with ROC.
If the appointment is not in conformity with the procedures of Schedule XIII, approval of the Central Government is required, in the following manner:

before any application is made by the company to CG, there shall be issued by or on behalf of the company a general notice to all members indicating the nature of the application proposed to be made.
The notice is to be published at least once in a regional language newspaper and once in an English newspaper circulating in the district where the registered office of the company is situated. {Section 640B}.
An application shall be made to CG in Form-25A within 90 days from the date of appointment, together with the fee as per Companies (Fee on Applications) Rules, 1999.
A copy of the application along with all document (except fees) shall also be forwarded to the ROC.
In case the appointment is made without remuneration, CG approval’s will still be necessary if the appointment falls outside the provisions of Part I of Schedule XIII.

The appointment and remuneration payable to MD require approval of the Shareholders by Ordinary Resolution.{Clause I of Part III of Schedule XIII}.
The terms and conditions of the appointment of MD should be incorporated in an agreement executed by him with the company.
An abstract of the terms of agreement for the appointment of the MD should be sent to every member of the company within 21 days of entering into agreement.

Best Regards

Ajay Mishra (Company Secretary) (74342 Points)
Replied 07 September 2009

Dear Mr. Pravin

Yes, In case of Private Limited Company, the Article of Association gives details of the power of the Board of Directors including appointmtnt or reappointment of managing Director and Whole time Director.

Regards

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SUNIL KUMAR JAIN (PRACTISING COMPANY SECRETARY) (187 Points)
Replied 07 September 2009

Mr. Ajay Misra,

Nice to see the detailed procedure for appointment of a Manging Director.But the Company under reference is a private limited company( not a subsidary of a public company).To a private limited company, provisions of section 269, 198, 309 & Schedule XIII are not applicable.In case of a private limited company Managing Director is required to be appointed as per provisions of the Articles of Association of the company.

Regards,

CS S.K.JAIN

Sunil k. Jain & Associates,

9810104162

2 Like

SAMBIT KUMAR SARANGI (Manager Legal cum Company Secretary) (26 Points)
Replied 20 December 2010

Can a Public limited Company (Unlisted) can appoint three Whole-time Director and pay them remuneration.

(Guest)

@ Sambit kumar: It is possible.

Rajeev kumar Nayak (ACS) (283 Points)
Replied 20 December 2010

Hi,

In a private company which is not a subsidiary of public company appointment of MD is governed by AOA.

so simply pass the Board Resolution for appointment of MD and file form 23 with ROC within 30 days.

in my opinion if existing director is appointed as MD then there is no need of filing form 32 again at the time of appointment as MD. but if new person is appointed as MD then form 32 is required to be filed.

Rajeev Nayak

1 Like

Jayashree S Iyer (Company Secretary) (3224 Points)
Replied 21 December 2010

A public limited unlisted company can appoint 3 whole time directors and pay them remuneration however subject to the provisions / limits specified in Section 269, 309, 198 and Schedule XIII failing which CG approval is required.

A private company need not have MD. That being the case even if one is appointed as MD, does it require filing of Form 23 and Form 32 for change in designation.

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Nidhi Thakkar (CS Trainee.) (59 Points)
Replied 11 January 2011

Hi...

Agreed with Rajeev Nayak.....

Vivek Jaiswal (Management) (23 Points)
Replied 21 June 2011

Can a MD of Private Company appoint as a WTD in other Pvt. Co. ? if Yes then Pls reply me its urgent thnx in Advance

regards,

Vivek

sanjay kumar (Trainee) (44 Points)
Replied 22 March 2012

Hi,

A Pvt Co. which is not a subsidiary of a public company is simply a Pvt. Co. and appointment of MD under this co. will be governed by its AOA.

Moreover, appointment of MD is an agreement between company and MD for which e Form 23 is required to be filed under section 192 of the Act. Further to this Form 32 is also required to be filed as we are changing the Designation of a Director to Managing Director.

So we can appoint MD in a Private by passing a Board Resolution.

1 Like

Ajay Mishra (Company Secretary) (74342 Points)
Replied 22 March 2012

Yes a MD of private company can appoin as WTD of another company. There is no restriction on appointment in case of private company. Please check what is your company's article says about that.

Regards