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Regularisation of additional director

C.S. Rajesh Pillai (Company Secretary and Compliance Officer) (181 Points)

08 December 2009

We have appointed additional directors under section 260 of the Companies Act, 1956.

These Directors neither want to get regularised in the AGM nor ready to resign before the date of AGM, stating that directorship will get over on the date of AGM.

Section 260 of the Companies Act provides that if the appointment is not regularised in the AGM, the office will become vacant.

Suppose, if we do not regularise the director in the AGM., and Eform No. 32 is not filedfor regularisation, still the MCA system will show the name of the said director in the list of directors or not?

Whether it is mandatory in that case to file Form No. 32 ?

Kindly guide

regards,

Rajesh

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11 Replies

Avika, ACS (HR Legal and Management Consultant) (172 Points)
Replied 08 December 2009

Even in case of cessation of Directorship on the date of AGM, you have to file Form 32 with the ROC to inform the change in Directorate.

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C.S. Rajesh Pillai (Company Secretary and Compliance Officer) (181 Points)
Replied 08 December 2009

thank you for the reply.

In our case, the said directors did not give consent to regularise the appointment.

They are tendering the resignation dated today.

In such a situation how can we file form No. 32 for cessation of directorship under section 260

Is there any way out otherthan regularising them on the date of AGM and filing cessation by filing Form No. 32 with the present resignation letters?

regards

Rajesh

Suman Khurana (ACS) (209 Points)
Replied 08 December 2009

I think you can file F 32 attaching therewith the AGM resolution not regularising the directors because to regularise the Additional directors at AGM is in hands of shareholders.

Regards

C.S. Rajesh Pillai (Company Secretary and Compliance Officer) (181 Points)
Replied 08 December 2009

thank you very much

Rajesh

CS GK Murty (Company Secretary) (225 Points)
Replied 08 December 2009

Sec 303(2) states if change in directorship is made, the company has to intimate the same to ROC within 30 days from the date of event occurs.

In case of pvt. ltd. cos., unless the AOA expresses, Sec. 260 does not apply, hence regularization even if any addtional director is appointed under sec 260 unknowingly, does not arise.

In case of Public Ltd. cos, sec. 260 has to be complied with. Remember, Sec. 303(3) stipulates that if default is made in complying with the same, every director of the company wbo is in default, shall be pubishable witht a fine which may extend to 500 for every day during which the default continues.

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Juhi (PARTNER) (65 Points)
Replied 27 September 2010

With reference to the above mail, in case of a private company since Section 260 does not apply, so if no resolution is passed in AGM, shall the additional director automatically become regular director and further is it necesary to file Form 32

Ajay Mishra (Company Secretary) (74337 Points)
Replied 27 September 2010

Dear Friend,

The provision of section 260 will apply to public as well as private limited company in accordance with company’s article.

Such appointed additional director will hold office till the date of AGM from the date of appointment. If the company want to regularize such additional director in general meeting then it will called change in position of director and for this Form-32 will be filed with ROC with in 30 days of passing of such resolution in general meeting, whether it is public company or private company.

Regards

CS Ajay Mishra

Shraddha Shukla (Corporate law Consultant) (346 Points)
Replied 28 September 2010

Originally posted by : Suman Khurana
	Hi I think you can file F 32 attaching therewith the AGM resolution not regularising the directors because to regularise the Additional directors at AGM is in hands of shareholders. Regards

This is a solution to your problem, if you can do it practically i.e. if shareholders dont regularise then it starts cancelled.

Ajay Mishra (Company Secretary) (74337 Points)
Replied 28 September 2010

Dear Friend

There is no need to attach resolution of regularisation with Form-32, because it is nor mandatory, you can file Form-32 without attachment. But as a good corporate practice you can attached resolution pased by shareholder for regularisation of additional director.

Regards

Juhi (PARTNER) (65 Points)
Replied 28 September 2010

Thanks to all of you ..

One thing more.. as of now on our Board their are two additional director.

So can we keep one director as additional and the other one shall be regularised.

And whats the difference between the rights and duties of a regular director and additional director.

Regards

Juhi

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Ajay Mishra (Company Secretary) (74337 Points)
Replied 28 September 2010

Dear Friend

The tenure of additional director is from the date of appoint till the date of AGM. At the date of AGM such additional director will autometically vacant their office if they are not regularise in general meeting.

In your case if there are two directors and one is going to regularise, the other additional director will autometically vacant their directorship on the date of AGM.

Regards

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