Amit (Company Secretary) (73 Points)
15 April 2010Whether Company can appoint Wholetime Director(WTD) before expiry of his term.
I mean to say WTD term expires on say 31st March 2011, the Company wants to re-appoint WTD before expiry of his term i.e from 1st May 2010 for fresh period of three years. can company do so?
Thanks in advance
Amit
Ankur Garg
(Company Secretary and Compliance Officer)
(114773 Points)
Replied 16 April 2010
Yes company can do so. Effective date of appointment will be April 01, 2011.
Use the language below in your resolution (modify accordingly):
“RESOLVED THAT pursuant to Sections 269 ___________ read with Schedule XIII and other applicable provisions, if any, of the Companies Act, 1956, or any statutory modifications or re-enactment thereof, for the time being in force, and subject to the approval of members in the general meeting and such other sanctions and approvals as may be necessary, approval of the board be and is hereby accorded to the re-appointment of Mr. A as WTD of the Company for a further period of three years, with effect from April 01, 2011.
Amit
(Company Secretary)
(73 Points)
Replied 16 April 2010
So effectively it means that Company cannot reappoint WTD effective from 1st May 2010 during the continuation of his earlier term (which is going to expiry on 31st march 2011).
Ankur Garg
(Company Secretary and Compliance Officer)
(114773 Points)
Replied 16 April 2010
Why you want to appoint him w.e.f. May 01, 2010? I guess he can continue till March 31, 2011. Right ????
Amit
(Company Secretary)
(73 Points)
Replied 16 April 2010
Ankur Garg
(Company Secretary and Compliance Officer)
(114773 Points)
Replied 16 April 2010
Yes u r right. I suggested you the standard wayout. But if you wanna appoint him earlier than March 31, 2011, than according to me you may go ahead as there is no restriction and as mentioned by you also.
Also wait for other views.
Jagruti (CS)
(Service)
(1953 Points)
Replied 16 April 2010
In Companies Act, 1956 there is provision for reappointment of MD which is also applicable to WTD inSection 317 (3) proviso which states that reappointment cannot be done earlier than 2 yrs from the date of reappointment.
Amit
(Company Secretary)
(73 Points)
Replied 16 April 2010
proviso to sec. 317(3) just states that re-appointment cannot be sanctioned earlier than two years from the date on which it is to come into effect.
So can we interpret it as re-appointment will be effective from date on which term will expires (in this case from 1st April 2011) Or re-appointment can be made before expiry of term (i.e on 1st May 2010)
It doesn't say about the re-appointment made when previous term is continuing.
Amit
(Company Secretary)
(73 Points)
Replied 16 April 2010
Has any company followed this route of re-appointment of WTD/MD during the continuation of previous term. I could n't get any information on this.
Ankur Garg
(Company Secretary and Compliance Officer)
(114773 Points)
Replied 16 April 2010
Section 317 is not applicable to Whole Time Director.
However the same is applicable to The Manager by virtue of section 388.
CourseCart.in
(Mentor at SHAYVIDZ Academy)
(3756 Points)
Replied 16 April 2010
| Originally posted by : Ankur Garg | ||
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Section 317 is not applicable to Whole Time Director. However the same is applicable to The Manager by virtue of section 388. |
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Yes Ankur Ji is right. Sec 317 is not applicable to Whole Time Directors.
CAclubindia
