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Death of Director

SHAMBHU KUMAR BHAGAT (AUDIT) (28 Points)

30 June 2009

what happen on occassion of death of one director in private limited company when only two director in the company. please privide all produre to do by the remaining directo.

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11 Replies

Vaibhav Shukla (Company Secretary) (142 Points)
Replied 01 July 2009

in your case

1. Section 262 Filing casual vacancy does not apply to private co. which is not a subsidiary to public co. and such a co shall fill the casual vacancy as provided in the Articles of Association and or U/s 255 (2) of the Act, 1956.

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CS Ankur Srivastava (Company Secretary & Compliance Officer) (17853 Points)
Replied 01 July 2009

Dear Friend,

In this case Additional Director is to be appointed for only maintaining the strength of the Board. He cannot do any other act, but only for the purpose of maintaining the strength of the Board.

After that more directors may be appointed or he may be regularise after the expiration of his tenure.

Ankur Garg (Company Secretary and Compliance Officer) (114773 Points)
Replied 01 July 2009

I totally disagree by the reckless answer given by Mr. Shukla.

Here I would like to clarify one thing that Section 262 is an enabling section and not a restrictive one. Hence the statement== “Section 262 Filing casual vacancy does not apply to private co…….” is absolutely wrong.

Also in this case there is no applicability of Section 255(2).

Mr. Bhagat,

In the above situation you have 2 options as supported by Regulation 75 of Table ‘A’.

You may appoint one Additional Director u/s 260 by following Regulation 75 of Table ‘A’ ; or

You may also summon a General Meeting of the company to increase the strength of Board of Directors by appointing a regular Director.

Study Regulation 75 of Table ‘A’ thoroughly.

Note one important thing above Regulation 75 of Table ‘A’ is available to you only in case you have not exclude the Table ‘A’ in its entirety. In case you have exclude the applicability of Table ‘A’ then in that case you have to rely up on your present adopted Articles of Association.

If you need any further clarification please revert.

Best Regards

1 Like

Ajay Mishra (Company Secretary) (74337 Points)
Replied 01 July 2009

Thanks Mr. Ankur Garg for clarifing the above question.

Regulation 75 only give power to the continuing director or directors to fix for the quorum or summoning a general meeting of the company and not for any other purpose.

Regards

CS Ankur Srivastava (Company Secretary & Compliance Officer) (17853 Points)
Replied 01 July 2009

Dear Ankur Garg,

Yes, section 262 is an enabling section however it does not apply in case of private companies.

It is clearly mention therein that "in case of a public company or a private company which is a subsiadiary of a public company"

Please correct me if i am wrong.

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Purna Salian (Company Secretary) (36 Points)
Replied 01 July 2009

Dear Mr. Ankur Garg,

S 262 is not applicable to pvt. cos. thus your statement “Section 262 Filing casual vacancy does not apply to private co…….” is absolutely wrong " is wrong.

refer Pg 2639 of A Ramaiya under S. 262.

In the above case the company should follow its articles and if the articles are silent Table A Reg 75 is applicable Apart from this

The Company may fill this vacancy by appointing an additional director and such board meeting shall be for the said purpose only but it cannot fill a casual vacancy u/s 262

Or convene a General meeting to maintain the statutory mininum no. of directors fixed by the act. Your Point No. 2 also governs by S. 255 (2) and or Reg 75 of Table A thus there is applicability of S 255 (2) some how

The answer of Mr. Shukla is not totally disagreeble although it may lack clarity of the fact.

Ankur Garg (Company Secretary and Compliance Officer) (114773 Points)
Replied 01 July 2009

Hi,

No Mr. Srivastava you are not wrong but you are simply giving literal interpretation to that phrase pasted by you i.e. "in case of a public company….”. If you go by the literal interpretation then you are absolutely right.

But for me following the literal interpretation of section 262 means a purely Private Company in that case can not fill C.V. unless authorized by its AOA or before altering its AOA to that effect, which would be a kind of hardship for such purely Private Company.

As per my interpretation section 262 is not a huge procedural section exemption from which would prove really advantageous for a purely Private Company then what is the benefit to say it does not apply in case of private companies rather i would say it is available to a purely Private Company and if AOA of purely Private Company are silent still such company may fill its C.V. by following section 262.

As per my opinion it would be beneficial for a purely Private Company to voluntarily adopt Section 262 as it is not a hard procedural Section like Remuneration to Managerial Personnel provisions. I always believe in come out from the bookish language and give the widest meaning to the language used by legislature keeping myself with in four corners of law.

Hope you understand my point of view and again you are right in your mentioning that section 262 does not apply in case of private companies as it is very much evident from the first 2 lines of section 262 itself.

Best Regards

Vaibhav Shukla (Company Secretary) (142 Points)
Replied 02 July 2009

Mr Ankur Garg,

Nobody is supposed to use such harsh words Like RECKLESS as you did in ur last reply specially when u are admitting that the literal interpretation of the section 262 is correct. Its a professional group and professional approach is expected to be followed

Mr Shukla

Ankur Garg (Company Secretary and Compliance Officer) (114773 Points)
Replied 02 July 2009

Dear Shukla Ji, Kindly accept my sincere apology for using such harsh and unnecessary language.

Best Regards

1 Like

RAHUL (Company secretary ) (226 Points)
Replied 09 July 2009

DEAR FRIEND

YOU ARE REQUIRE ONLY FORM NO. 32 WITH IN 30 DAYS OF DEATH AND YOU WANT ANY MORE HELP PL.SENT ME QUERY ON MY E.MAIL. nitinagarwal113 @ gmail.com

REGARD

NITIN

Regards,

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darshanvankawala (article) (21 Points)
Replied 16 February 2011

dear sir ,

I have an query regarding the same matter so if possible can u just explain with the help of any famous case.

In one company there were two director and and one of the director of them died due to heart diseases so now can you explain the consequences to appoint the director for making the required quoram.and is it possible through which section and scheduled with some proper case detail.There is also a provision in the article to fulfill any vacancy arise in the comapny..

please specify with come perfect case law relating to the same matter....

with regards ,

Darshan Vankawala