A MNC has appointed a person the Head of the Office to run the day to day business of the office in India. In many cases, this person has not received any “official” authority or has not been appointed as a managing director.
1. What is his/her responsibility and liability?
2. Can he be considered as a “de facto” managing director?
3. Can we consider that he has the authority to represent and bind the Company because of his function?
Upto my understanding;
1. The said Gentelman is not personally liable for the acts done.
2. He can not be treated as "De facto" Managing Director.
3. He can be held liable for the acts done by him under the Contract Act (he is the agent of the company).
I don't think that he is covered under Section 5 of the Companies Act, 1956.
Others views solicited.
Regards,
Thanks for your quick replies. I would like to know whether the appointment checklist provided is applicable for a private Company
Hey!
Sec 269 and the Schedule XIII does not apply to pvt. co. so in your case(In Pvt. Co.) only form 23 and form 32 is sufficient.
Dear Friend,
As per your query, such person is appointed as head of the office not head of the company. He can not be treated “as de facto” Managing Director.
If a company wanted to appoint a person as MD of the Company nor for office, the pre condition is he should be director of the company.
In your case, the provisions of appointment of MD will not apply.
Regards
CS Ajay Mishra
hi...the person appointed as head of the office cannot be called as MD of the company..you can call him as office incharge or Branch manager.and not MD.
CAclubindia
