Hello,
I want to confirm the role of Nominee directors in a company when this nominee director is appointed by the Holding Company in its subsidiary. Can a nominee director be authorize for general working of a company.
Regards
Nidhi
2 Replies
Parashar
(Company Secretary 2004)
(1013 Points)
Replied 09 September 2011
Hi
There is nothing specific mentioned under the Companies Act, 1956 on Nominee Director, becaue they are nominated by specific authorith for purpose. Listing agreement have something for them.Yes certainly the recent notification have given heavy weight to the position of nominee direction just check this circular:
Ministry’s General Circular No. 08/2011 dated 25.03.2011
(Guest)
Nominee Directors are appointed by third parties like banks/ financial institutions.
Holding company being a shareholder can directly appoint directors in its subsidiary being whole-time directors or managing directors and can control the composition of the Board.
Important considerations are: Type of Co - Public or Private, Paid up Share Capital, AoA provisions, current directors, proposed directors, Schedule XIII conditions, Disqualifications checklist, Percentage of holding in subsidiary.
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