Shabnam Siddiqui (Company Secretary) (152 Points)
08 September 2010In our company, MD was appointed on 07.01.2005(Public Company) and his terms as per section 317, expires on 07.01.2010. But no re-appointment was made afterwards. As per my understanding, the MD after ceasing to be MD, has become, director by designation. Now what is the procedure to appoint him again as MD.
My question is "Can we appoint him as MD in this sept AGM? Or we'll have to regularise him as director only? What he will be considered for the period from Jan, 2010 to Sept, 2010?
Ankur Garg
(Company Secretary and Compliance Officer)
(114773 Points)
Replied 08 September 2010
Re-appointment of Managing director-Unlisted public company
Dear friend,
Re-appointment of Managing Director in a public company can be done by board meeting resolution subject to the approval of shareholders in a General Meeting.
For example if the term of your Managing Director expires on 06.01.2010 there is no need to worry at all. Simply pass a board resolution before 06.01.2010 subject to the approval of members in the general meeting and confirm the appointment in next General Meeting held immediately after his/her appointment by the board.
File all the necessary ROC forms (form 23 and form 25C) from the date of board resolution. Nothing is to be filed after General Meeting for confirmation as far as re-appointment of Managing Director is concerned.
Remember one thing retrospective re-appointment of Managing Director is not possible due to section 317 hence passing of Board Resolution subject to the approval of members before 31.03.2010 is mandatory.
As per DCA clarification the above practice is very much possible. Find below the extract of DCA clarification:
As per circular number 2/94 dated 10 February 1994— Managing Director may initially be appointed by a board resolution subject to the approval of members in the general meeting and such approval may be obtained in the first general meeting of the company held immediately after his appointment by the board.
E-form filing with ROC:
1. Form-25C/25A, as the case may be, under section 269 within 90 days from the date of passing of board resolution.
2. Form-23 under section 192(4)(c) within 30 days of passing board resolution.
Form-32 is not required in case of re-appointment of Managing Director as there is no change composition in board of directors involved.
Best Regards
Ajay Mishra
(Company Secretary)
(74337 Points)
Replied 08 September 2010
Dear Friend
As per your queries, a person can be director after his/her expiry of tenure of MD. In your case, the company has defaulted for not re-appointed a MD before January 07, 2010. The company can not appoint MD retrospectively.
I suggest you to appoint such director as MD in any BM after January 07, 2010 for a further period of 5 years and take shareholders approval in any general meeting after appointment. There is no need to wait of AGM for appointment of MD. But after appointment you can take approval of shareholders in any general meeting held after appointment.
Regards
CS Ajay Mishra
Ankur Garg
(Company Secretary and Compliance Officer)
(114773 Points)
Replied 08 September 2010
You are requested to read the date 31.03.2010 mentioned in 4th para of my reply as 06.01.2010. It was a typing error.
Inconvenoence caused is regretted.
Thanks
Shabnam Siddiqui
(Company Secretary)
(152 Points)
Replied 08 September 2010
Thanks for your reply
But for this we have to file form 25C and 23, which will attract penalty. Our company is an unlisted public company having a paid up capital of less than 5 crore and as per section 269(1), appt of MD is not applicable as such. Still we want to appoint MD but without paying any penal fees.
Now what is the remedy available. I suggested to re-appoint him as director only. Is there any other way to appoint him again as MD in this AGM only as a fresh appointment?
Ankur Garg
(Company Secretary and Compliance Officer)
(114773 Points)
Replied 08 September 2010
Nothing to worry about...As section 269 is not applicable to you you can re-appoint him as MD in the ensuing AGM.
Time gap berween january to till date does not make any default.
Thanks
Ajay Mishra
(Company Secretary)
(74337 Points)
Replied 08 September 2010
Dear Friend
In case of private the provisions of section 269 will not apply. If your management decides not to further appoint him/her as MD for further period, you just file Form-32 with ROC regarding change in position of MD.
Others views are also solicited.
Regards
CS Ajay Mishra
CAclubindia
