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Appointment of md/wtd in an unlisted public ltd. company

Shikha (Company Secretary) (27 Points)

05 March 2014

Can anyone please help me and guide on the below mentoned matter.

I have to appoint a MD/WTD in an unlisted public ltd. company and pay remuneration to said MD/WTDs. The Company is having minimal profit and paid-up share capital of the company is also below Rs. 5 crores. In such a case, sec. 269 and Sch XIII is not applicable. Hence, Part II of schedule XIII cannot be considered by me for giving remuneration. Form 25A does not give correct category to be selected for the proposal for giving remuneration in excess of % specified in sec. 198(1).

Please let me know the procedure for5 appointment of MD/WTD and giving them remuneration in such a case.

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3 Replies

P C Agrawal (Registered independent director Past Chairman of Aurangabad Chapter of ICSI Practicing Company Secretary at Aurangabad) (8229 Points)
Replied 05 March 2014

In a public company having share capital of less than Rs.5 crores, appointment of MD/WTD is not mandatory. However, still if the co. so appoints MD/WTD you will have to follow provisions of Section 269 read with Sch.XIII.

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Shikha (Company Secretary) (27 Points)
Replied 07 March 2014

There has been lot of confusion regarding applicability of sec. 269 and sch xiii in case of appointment of MD/WTD in a company having share capital less than 5 crores. Can you please let me know what is required to be referred to confirm the same.

P C Agrawal (Registered independent director Past Chairman of Aurangabad Chapter of ICSI Practicing Company Secretary at Aurangabad) (8229 Points)
Replied 07 March 2014

Shikha, there is no confusion. As per Sec.269(1) it is not mandatory to appoint MD in co. with paid up capital of less than Rs.5 crores. However, as per Sec.269(2) appointment of MD in any public company has to be with CG approval unless Sch.XIII is complied with. Sec.269(2) does not talk of paid up capital. Hence you can pay remuneration to him as per Sch.XIII else you will have to take CG approval.