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Appointment of md

Niraj Parmar (trainee) (60 Points)

13 April 2016

IN 2010-11 the private limited company is incorporated & at that time there are two MD are appointed under companies act 1956. now what are the provisions applicable under companies act 2013 regarding this MD Appointment? is there any violation of law if both the MD are continue as a MD?

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6 Replies

CS Ankur Srivastava (Company Secretary & Compliance Officer) (17853 Points)
Replied 13 April 2016

Both the MD may continue as MD.

There is no problem under CA 2013

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Niraj Parmar (trainee) (60 Points)
Replied 14 April 2016

sir,

re-appointment of MD can be made after 5 years of completion.

so in this case re-appointment provisions are applicable from 2010-11 (i.e. from incorporation) OR from commencement of the companies act, 2013?

if these provisions are applicable from 2010-11 then 5 years are already completed in 2014-15. so now what to do with this case?

CS Ankur Srivastava (Company Secretary & Compliance Officer) (17853 Points)
Replied 14 April 2016

IT depends on the terms of appointment..... reappointment to be made according to his terms of appointemnt there is nothing to do with INcorporation or CA 2013.

Niraj Parmar (trainee) (60 Points)
Replied 14 April 2016

SIR,

as per section 317(4) and 388 of companies act 1956 Private limited Company can appoint a person as its MD for a period of more than 5 years.

now under companies act 2013 this exemption to Private companies is wirthdrawn so now i have to re-appoint the MD after 5 years of appointment & the appointment of MD is done under companies act 1956. so my question is from which year the re-appointment provisions are applicable?

thank you.

CS Ankur Srivastava (Company Secretary & Compliance Officer) (17853 Points)
Replied 14 April 2016

Earlier, the provisions of section 269 were not applicable to Private Limited Companies and the Appointment of MD was done in the earlier Act and i suppose no term was should be fixed for the appointemnt at that time.

it is clearly given in section 197(2) No Company shall APPOINT OR REAPPOINT any person as its Manging Director, Whole Time Director or Manager for a term exceeding five years at a time.

In that case, in my opinion, you need to do nothing to change the appointment as per new act. IN caseof any change (appointment or reappointment) you need to comply the provisions of the New Act. Other wise he may continue as MD as per his terms of appointment.

It is my opinion, Contrary views are welcome.