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Managing director_ca 2013

09 May 2014

Dear All,

In our private company MD was appointed in 2008 as and no term of his office was decided as provision of 5 years terms of MD were not applicable on private company.

Now we have to increase his salary from 01.06.2014, and his term will also be fixed for 5 years as per section 196 of CA 2013.

My query is whether we will be required to file MR-1 for his fixing of the term and if yes then what will be the effective date of appointment in this case?

Or this being just variation in his term of appointment , filing of MGT.14 for board resolution and separately for SR passed by shareholders in general meeting will be sufficient?

Thanks

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5 Replies

P C Agrawal (Registered independent director Past Chairman of Aurangabad Chapter of ICSI Practicing Company Secretary at Aurangabad) (8229 Points)
Replied 09 May 2014

In my view, only increase in remuneration is required and appointment/reappointment is not required.

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RoHaN k (CA & CS) (308 Points)
Replied 09 May 2014

In my openion , If Fresh 5 Year term + Revision of terms of salary

I think MR-1 will suffise. ( erstwhile 25 C)

Siddharth Singh (CS) (134 Points)
Replied 09 May 2014

Dear Sir,

The section 196 of CA 2013 says that term of MD shall not be more than 5 years at a time.

So will I have to fix terms of our MD for five years w.e.f. from 01.04.2014 when this provison became applicable. And if yes then will I have to file form MR.1 (return of appointment) also what should be the effective date of appointment in this case, whether 08.12.2008 (original date of appointemnt as MD as per CA 1956) or 01.04.2014.

Or will I have to just file form MG.14 (section 117) and take approval of shareholders for the increase in remuneration and fixing of his term and my compliance will be done.

Kindly shed some light.

RoHaN k (CA & CS) (308 Points)
Replied 09 May 2014

Yes , then only increase in remmuneration with MGT-14. for now.

No need of re-appointment or fresh appointment w.e.f. 01 / 04 /2013.

Further please consider the tenure as per the agreement because if such director is his last year of tenure then only he can be re-appointed as per companies act 2013,

Siddharth Singh (CS) (134 Points)
Replied 09 May 2014

My query is that the My MD's term has not been decided but can be terminated by the Board at any time. As mine is private company and section 317 of CA 1956 was not applicable. So in this case do I need to re-appoint him for 5 years now from the date of increase in his remuneration.