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Corporate Law

S.Jegadeesan (CA Student) (637 Points)

13 September 2009

I want to clarify one doubt related to corporate law.i.e.

Managing Director of a company can work in any other company?

Can a single person work as a director of more than 15 companies?.

Please clarify the above question.

Regards,

S.Jegadeesan.

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1 Replies

Manmohan ACA, CS (Chartered Accountant ) (14243 Points)
Replied 13 September 2009

Yes a managing director can work in any other company only as employee but not as a MD or manager

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 any other company (including a private company which is not a subsidiary of a public company) [316(1)]

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, other company (including a private company which is not a subsidiary of a public company):if such appointment is made or approved by a resolution passed at a meeting of the Board with the consent of all the directors present at the meeting and of which meeting, and of the resolution to be moved thereat, specific notice has been given to all the directors then in India.

CG may, by order, permit any person to be appointed as a MD of more than 2 co,s if the CG is satisfied that it is necessary for proper working function as a single unit and have a common managing director.

director can NOT be appointed in 15 company, hwever for computing 15 company following should be excluded --

(a) a private company which is neither a subsidiary nor a holding company of a public company;

(b) an unlimited company;

(d) a company in which such person is only an alternate director.

regrds,,,,,,,,,,,,,,,!