Mohammed Yasar (Practicing Company Secretary) (119 Points)
04 September 2012Whether MD can be appointed by the Board of Directors of a public Company without going for shareholders approval in the following circumstances?
1. AOA of the said company is silent about appointment of MD.
2. MD is not going to avail any remuneration.
Muthukumar
(Chartered Accountant)
(78 Points)
Replied 04 September 2012
No.. I feel that the BOD cannot appoint the MD without the shareholder's approval...BOD can appoint only additional directors who can hold office until the next AGM in which the appointment of the concerned director has to be regularized by the shareholders... Hence MD cannot be appointed without shareholder's approval...
Aditya Soni
(CS Final Student Trainee)
(727 Points)
Replied 05 September 2012
Agree with Mr. Muthukumar.
ARUN KUMAR MAITRA
(Practicing Company Secretary)
(1016 Points)
Replied 05 September 2012
If the appointment of MD is as per schedule XIII of the Companies Act,then Form 25C is to be filed with the Central Govt. for their information only.Otherwise Form 25A is to be filed with them for their approval except in the case of unlisted companies,whch are not subsidiaries to listed companies. Both the forms require attachment of shareholders approval.However , vide Circular No. 2/94 dated 10th February, 1994 of McA ,the MD may be initially be appointed by resolution passed by the Board subject to the approval of the company in general meeting and such approval may be obtained in the first general meeting of the company held immediately after his/her appointment and fixation of remuneration by the Board.
In view of the above,MD cannot be appointed without Shareholders approval under any circumstances.
CS Ankur Srivastava
(Company Secretary & Compliance Officer)
(17853 Points)
Replied 11 September 2012
You have to take the concurrence of the shareholders by way of ordinary / special resolution in case schecule Xiii part II, section II applies.
Otherwise the appointment of MD may be made directly by the Board under section 269 and form 32, 23 and 25C are to be filed.
CAclubindia
