Go Ad-Free on CAclubindia with Daily Mobile Updates. Subscribe Now!

Continuation of appointment of md/wtd

Deepali (student) (9 Points)

17 April 2018

Our company is a Private Limited Company and appointed MD &WTD as per provisions of Companies Act, 1956 where there was no maximum duration of appointment. Now since the Company Act, 2013 is largely in force. Whether our company is required to reappoint MD/WTD( 5 years had been passed) or the previous appointment will be continue? Please suggest.

Reply
Follow
Share

4 Replies

Jatin Bajaj (CS) (2930 Points)
Replied 17 April 2018

As per the provisions of Companies Act 1956, there were no maximum duration for appointment of managing or whole time director of the Company. But as per Section 196 (2) of the Companies ct 2013, no Company shall appoint or re-appoint any person as its managing Director or whole time Director for a period exceeding 5 years. So, Company has to appoint the managing Director for a period of 5 years from April 2014 and such Managing director shall hold the office for the period of 5 years till 2019. Previous appointment will not continue. However Provisions of Section 196(4) and (5) is not applicable on private Company, So such managing director shall not be regularized by passing special resolution in General Meeting.

Upgrade to CAclubindia Pro. Subscribe Now!

Deepali (student) (9 Points)
Replied 18 April 2018

Which form is to be filed for reappointment of MD after 5 year by private company?

Jatin Bajaj (CS) (2930 Points)
Replied 18 April 2018

For re-appointment of Managing Director, Just pass the Board resolution for re-appointment of Managing Director and file form DIR 12 within 30 days of re-appointment along with CTC of Board Resolution.

P C Agrawal (Registered independent director Past Chairman of Aurangabad Chapter of ICSI Practicing Company Secretary at Aurangabad) (8229 Points)
Replied 18 April 2018

Tenure of 5 years under the new Act is applicable only at the time of appointment or re-appointment. In case of private company when the appointment was made under the old Act for indefinite period, there is no question of his appointment or reappointment now and hence the provision of 5 years will not apply. No action is required to be taken by the company.