Geetha Gupta (Accountant) (325 Points)
16 October 2015Hi all,
Regards,
Geetha
Kalpesh Veer
(PCS)
(795 Points)
Replied 16 October 2015
Geetaji,
Do you appoint Director or Managing Director?
Please go through section 164 of the Companies Act 2013 once. It will tell you disqualification of directors.
If you appoint MD (whoes age more than 70 yrs.) than it requires Special Resolution. Also Maximum appointment for 5 years. Also you required to file form MGT-14 as well as Form MR-1. MR-1 is mere return we filed to ROC.
Geetha Gupta
(Accountant)
(325 Points)
Replied 16 October 2015
Kalpesh ji,
This director was already appointed b4 CA2013, in 2002 and is still holding office. This person is 72 now.
the question is does this continuing in the office by this 70+ person require any action on the part of the company in veiw of the age limit imposed by sec196 of the new act?
I checked sec164 of CA2013. No, there is no disqualification as per that section.
Regards,
Geetha
Kalpesh Veer
(PCS)
(795 Points)
Replied 16 October 2015
Geetaji,
Section 196 is applicable on MD, WTD and manager. If you appointing any non executive director or Independent Director than you not required any kind of special resolution. But if you appoint executive director than it will require special resolution (i.e. as per definition executive director means whole time director). We appoint already 70 plus director in our company by passing resolution in AGM.
Regards,
Kalpesh
Geetha Gupta
(Accountant)
(325 Points)
Replied 16 October 2015
Kalpesh ji,
I am not discussing a fresh appointment.
I am asking whether a person, who had been previously appointed, before 1st april 2014, the day on which sec 196 came into force, can continue in office if that person has turned 70+ after that date and if so for how long after that date? does continuation of that person need any action on the part of the company and if so, what?
Regards,
Geetha
Kalpesh Veer
(PCS)
(795 Points)
Replied 16 October 2015
The impact of the word “continue” in Section 196(3)(a) is as regards cessation under section 196 (3) (b), (c) and (d) of CA, 2013 where there is immediate cessation on the happening of the events in these clauses. As regards Section 196 (3) (a) of CA, 2013, the word “continue” in this sense shall apply to appointment and reappointment. That is to say, in case the appointee is of 70 years at the time of his appointment or reappointment, a special resolution would be required as per the proviso. There would be no interruption in the appointment of any director made prior to 1 April, 2014 even when the person crosses the age of 70 years during the term of his appointment. Further, where a Managing Director is appointed after 1 April, 2014 and he attains 70 years during the term of his appointment, such appointment would also not be interrupted. There is no mid-tenure cessation of Managing Directorship as a result of Section 196 (3) (a) of CA, 2013.
Kalpesh Veer
(PCS)
(795 Points)
Replied 16 October 2015
Geetaji,
Where a Managing Director was appointed before commencement of CA, 2013 and he attains the age of 70 after 1 April, 2014, there would be no automatic cessation of the appointment. On completion of the term of appointment, if there is a proposal to re-appoint such person as Managing Director, the company would have to comply with the provisions of Section 196(3)(a) of CA, 2013 read with the proviso and pass necessary special resolution.
Geetha Gupta
(Accountant)
(325 Points)
Replied 16 October 2015
Kalpesh ji,
Thanks for this detailed reply. So this means a 70+ person can continue as director, for the entire term of the appointment, without anything to be done at present by the company.
But one problem still remains - I noticed this just now, in your replies. In this particular case, there was no term specified as such when this person was appointed. He was appointed in 2002 and has been there since. This would essentially mean appointment till death or may unsound mind etc.
what about this situation?your answer still stands??
Regards,
Geetha
CAclubindia
