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Query regarding aditional director-very urgent

Mishu (CA) (95 Points)

11 August 2011

Dear members,

I have a query regarding additional directors.

Our company is restrained from holdingAGM by order of CLB. Due date for holdin AGM is 29/09/2011.

company has appointed one additional director in the year 2010-2011.

according to section 260 he hold office uptill AGM only.

1. how should i regularise him if AGM can not be held.

2. Notice under section 257 is compulsory or not (which says appointment at AGM)

3. does majority of directors approval is required for his appointment ( we have 5 directors on board other that add. dir)

Thanks

Meeshu

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6 Replies

CA CS CIMA Prakash Somani (Landmark Group) (23502 Points)
Replied 11 August 2011

i think CLb in its order itself should appoint a additional director to safegaurd interest of the company

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Mishu (CA) (95 Points)
Replied 11 August 2011

No he s not the CLB's Additional director. Mangement appointed him in the year 2010-2011

So how to treat him under section 260 and 257

RG - A Helping Hand (Company Secretary) (13867 Points)
Replied 11 August 2011

No need to worry about his re-appointed. He remains as AD till the conclusion of AGM and if there is no AGM he will continue as AD till the time AGM held. No need to regularize him.

Notice u/s 257 is just a secretarial compliance and not required to be submitted with any authority. So just prepare it for records.

To regularize him in general meeting approval of shareholders is required and not of directors.

Thanks

Mishu (CA) (95 Points)
Replied 11 August 2011

but according to clarification in Ramaiya it says AD will cease to be in office on the latest due date of AGM in accordance with provision of sections 166 and 210

Prashanth (Chartered Accountant) (2322 Points)
Replied 11 August 2011

Dear isha,

As per sec-260 of the companies Act additional director can be apponited either by board of directors or by share hoders,so in the given case after completion of the term in respect of additional director he can be re-appointed again as additional director by the board of directors(i.e. at board meeting or by circulation).

So Holding of AGM in respect of reappointing additional director is immaterial

comments are welcomed.

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CA SOURAV KUMAR GANDHI (B.com (H), CA ) (133 Points)
Replied 11 August 2011

As per Sec. 260, the Additional director can hold office upto the next AGM, or where AGM is not held up to the date when AGM is ought to have been held. This means additional director will have to vacat office whether AGM is held or not. He can not hold office on the ground that AGM is not held.

Further a notice can be moved u/s 257 (appointment of person other than retiring director) in the same AGM by the additional director to Co., upon receipt of such notice from such person co. shall give atleast 14 days notice to members informing the members about the candidature notice received from such person i.e. previous additional director. Then such person shall be appointed by shareholders in the General Meeting.

Further, if your co. cannot hold AGM then you can move for EGM.

Hope i succeed to clear your doubt.

Thanks & Regards

Sourav

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