Can a shareholder holding more than 10%shares in a Private Limited Company call for an Extraordinary General Meeting for appointing himself as an additional director though the Articles of Association provides for appointment of additional director by the Board
cs ashwini kumar
(Company Secretary in Practice)
(173 Points)
Replied 26 January 2011
An individual may be appointed as an additional director pursuant to provisions of Section 260 of the Companies Act, 1956 (the Act) by the Board of Directors (not in EGM) provided AOA of the Company permits for the same. Tenure of office of such additional director is upto the date of coming AGM only.
However, an individual holding 10% or more shares in a Private Company may, pursuant to provisions of Section 169 read with section 255(2) of the Act, request to the Board of Director for calling an EGM for appointing himself as Director of the Company (NOT Additional Director) but such appointment would be subject to the articles which may provide otherwise. If the articles are silent as to the appointment of directors in a private company, or do not specifically provide for the appointment of directors otherwise than at a general meeting, then the directors of a private company are to be appointed by the shareholders at general meetings.
Regards
CS Ashwini Kumar (csashwini1970 @ gmail.com)
CAclubindia
