No neha, you are wrong, if proposed appointing company is private company then there is no need for CG apporoval
Roshni Agrawal
(company secretary)
(33 Points)
Replied 21 August 2010
again making complications......
CS Ankur Srivastava
(Company Secretary & Compliance Officer)
(17853 Points)
Replied 21 August 2010
First of all if any person is already a managing director in any public company then he can be MD only in 1 other company whether it is public or private.
See, i am totally confirm because i just completed this section with reputed teacher Mr. Deepak Gajrani, C.S., L.L.B and if you have still doubt then take a chance fill form 25A for CG approval in appointment in private company and see whether you wil get the apporval or not
at last, i am true to best of my knowledge
thanks
CS Ankur Srivastava
(Company Secretary & Compliance Officer)
(17853 Points)
Replied 21 August 2010
Yes, but only with central Government approval.
Roshni Agrawal
(company secretary)
(33 Points)
Replied 21 August 2010
ok all members ,
after reading all my conclusion is :
If Mr. A want to become MD in any other PUBLIC co , than it need unanimous consent from all the director if Mr A is already MD of any Pub/Pvt comp.
but if Mr A want to becom MD of more than 2 PUBLIC com than he need Govt approval , over all he can becom MD of 15 Public company with Govt approval.
ABT PVT.: Mr A can become MD of any number of Pvt Company . he need no approval or Unanimous consent , since act is silent.
CS Ankur Srivastava
(Company Secretary & Compliance Officer)
(17853 Points)
Replied 21 August 2010
Originally posted by : Mukesh Rawal | ||
See, i am totally confirm because i just completed this section with reputed teacher Mr. Deepak Gajrani, C.S., L.L.B and if you have still doubt then take a chance fill form 25A for CG approval in appointment in private company and see whether you wil get the apporval or not at last, i am true to best of my knowledge thanks |
Dear Mr. Mukesh,
First of all, with due respect to your teacher, you may be confirmed but please try to consider the intention of law and dont make complications...
How can a person be in the full time employment in various companies. Whether it is good for the management of the Company.
This is the reason why there is a limitation of only 2 companies otherwise a director can be a director upto 15 companies.
We are professionals, we should try, to our best level, to comply with the law along with the intention of law and not to find the weak points of the law.
I totally agree with you that 316 only limits the appointment in the Private Company however, as he get appointed in any third Company he has to leave the Public Company(ies).
Please see the words " appoints or employ".
Therefore, it is recommended, not to appoint any one as MD in more than 2 Companies without the approval of central government.
Further, central government approval would only be taken in case the MD is appointed as a Group Companies otherwise central government would also not give approval for the appointment of MD in more than 2 different organisaions.
vivek
(CS)
(751 Points)
Replied 21 August 2010
Completely agree with Ankur Sir; go through the section 316 it says:-
316(1) [No public company and no private company which is a subsidiary of a public company] shall, after the commencement of this Act, appoint or employ any person as managing director, if he is either the managing director or the manager of 4[any other company (including a private company which is not a subsidiary of a public company)], except as provided in subsection (2).
(2) 5[A public company or a private company which is a subsidiary of a public company] may appoint or employ a person as its managing director, if he is the managing director or manager of one, and of not more than one, 6[other company (including a private company which is not a subsidiary of a public company):]
Intention is quiet clear that the MD'ship of Pvt. Company will be recokned.
Regards,
Gourav Sharma
(-)
(24 Points)
Replied 21 August 2010
Hi all.
Sec. 316(2) and 316(4) clearly apply to the situtations given.
Answer to 1st question:
An individual can be MD in 2 public companies by complying with Requirements of Sec. 316(2), viz.
(a) Unanimous Board Resolution to be passed in Board Meeting
(b) Specific Notice of the BM and of the Resolution is to be given.
An individual can be MD in more than 2 companies by complying with Requirements of Sec. 316(4), viz. -
(a) Approval of CG is to be obtained
(b) CG to be satisfied that all the companies are working as a single unit and must have common MD.
To sum up, with CG approval an individual can be MD in any no. of companies - simply no limit.
Answer to 2nd question:
Sec. 316 does not apply to a private company. Accordingly, an individual can become MD in any no. of private companies without complying with requirements of Sec. 316(2) or 316(4).
Answer to 3rd question:
As such, there is no limit on no. of private and public companies of which an individual can be MD. For becoming MD in any no. of private companies, Sec. 316 shall not be attracted. But, for becoming MD in a public company, Sec. 316(4) needs to be complied with if the individual is already MD in 2 companies.
Kalpesh Chauhan,
(Tax Assistant (Accounting Technician CA FINAL CS PROF. PROG. B.Com))
(8311 Points)
Replied 22 August 2010
Avni Rathore
(-)
(201 Points)
Replied 22 August 2010
Thanks Mr. Gourav for the well deliberated reply.
Master GSTR-9 and 9C with India's First Unique Live Course with Live practical training