Go Ad-Free on CAclubindia with Daily Mobile Updates. Subscribe Now!

Wtd

Priyanka (Assistant Company Secretary) (905 Points)

20 March 2013

While appointment of a whole time director of a private company,which are the e forms required to be filed...please reply.

Reply
Follow
Share

3 Replies

CA Shree Jain (Chartered Accountant) (1572 Points)
Replied 20 March 2013

Procedure for appointment of MD /WTD by the board of directors where no remuneration is being paid

1.	In case of a Private Company which is not subsidiary of a Public Company, the provisions of this section are not applicable and the appointment will be governed as per the Articles of Association of the Company. In case of Public company also check the provision of Articles of Association of the Company.
2.	Convene Board Meeting after giving notice to all the directors [Section 286] to discuss besides others the following matters. · Approve the terms and conditions on which the Managing Director/ Whole Time Director/ Manager is proposed to be appointed.(Resolution) · In case the appointee had not completed the age of 25 years, but has attained the age of majority or had attained the age of 70 years, his appointment had to be approved by a [special resolution] passed in the AGM/EGM and [form No. 23] has to be filed with the ROC.
3.	Inform the Stock Exchange with which shares of the company are listed about the date of this meeting prior to the board meeting. [Clause 19 of the Standard Listing Agreement]
4.	Inform the said Stock Exchange within 15 minutes of the board Meeting, of the outcome of the meeting by letter or fax.
5.	Obtain a [written consent] [Section 264(1)] from the person who is to be appointed as Managerial personnel.
6.	There is no prescribed form for this written consent .
7.	Ensure that the appointment is made in accordance with the conditions specified in [Schedule XIII]
8.	File [e-Form no 23] (in case of Appointment of Managing Director only) within 30 days from the date of Board Meeting.
9.	File [e-form no 32] with the concerned ROC within 30 days from the date of Appointment.
10.	Such Director need to make a [intimation] with in twenty days to the other companies in which he is already a director, Managing Director, manager, Secretary. [Section 305].
11.	File [e-form no 25C] within 90 days from the date of Board Meeting.
12.	Pay the requisite fee through Credit Card / by cash / by cheque in favour of “MCA Collection Account ICICI Bank” at the prescribed rates. [Fee Calculator]
13.	Make necessary entries in the Register of Directors and in the Register of Director’s Shareholding [section 303(1) & 307].
14.	Notify the Stock Exchange with which shares of the Company are listed about the change in the company directors [Clause 30(a) of the Standard Listing Agreement]
15.	The Appointment has to be approved by the Company in the ensuing general meeting.
16.	If you are a listed company, note- That the Board of Directors of the Company shall have an optimum combination of executive and non-executive directors, independent and non-independent directors1

NOTE :

According to sub-section (1) of this section, every public company and every private company which is a subsidiary of a public company, having a paid-up share capital (both equity and preference) of the prescribed limit must have either a managing director or a whole-time director or a manager. The limit is prescribed under rule 10A of the General Rules & Forms, 1956. The present limit is Rs. 5 Crores

According to sub-section (2), every appointment or reappointment (appointment includes re-appointment vide Explanation to this section) of a person as a managing director or a whole-time director or a manager in a public company and a private company which is a subsidiary of a public company must be made with the approval of the Central Government, but no approval of the Central Government will be necessary to such appointment or re-appointment if it is made in accordance with the conditions specified in Part I of Schedule XIII, the remuneration payable is within the ceilings laid down in Part II and the requirements of Part III thereof are complied with. Thus, no approval of the Central Government under section 268 is required for the appointment or re-appointment, if it is made in terms of section 269 and Schedule XIII Part III of Schedule XIII stipulates, in its two paragraphs, two requirements, which must be complied with in relation to the appointment of a managing/whole-time director. These are as follows:

(1)	The appointment and remuneration referred to in Parts I and II of this Schedule shall be subject to approval by a resolution of the shareholders in general meeting.
(2)	The auditor or the secretary of the company or where the company has not appointed a secretary, a secretary in whole-time practice shall certify that the requirements of this Schedule have been complied with and such certificate shall be incorporated in the return filed with the Registrar under sub-section (2) of section 269.

It may be noted that according to sub-section (2) of section 269 a return in the prescribed form (e-Form No. 25C) is required to be filed electronically with the Registrar. The return should be filed within 90 days from the date on which the Board, regardless of the fact that the appointment is to take effect retrospectively or prospectively, passed a resolution. Where, however, the appointment is made by the members of a company, e.g. where the articles so provide, the return will be filed within 90 days of the general meeting at which the appointment is made. Para 8 of e-Form No. 25C accordingly requires to mention the date of the resolution passed by the Board of directors and/or shareholders and to enclose a copy of the relevant resolution.

Once the form is filed in relation to the Board resolution, there is no need for filing the form once again after the general meeting or the agreement entered into with the appointee.

The DCA has advised on this that a resolution in a general meeting approving the appointment may be passed even after the expiry of ninety days period from the date of appointment by the Board of directors, and is not required to be filed with the Registrar, so long as the resolution passed by the Board of directors has already been enclosed with the said return

DCA Clarification:

While filling the return in Form No. 25 C a copy of the resolution passed by the board of directors and/or shareholders in the general meeting is required to be enclosed with the return. In terms of paragraph I of part III of Schedule XIII to the Act, the appointment and remuneration of managerial personnel shall be subject to approval by a resolution of the shareholders in the general meeting. The said resolution in the general meeting can be passed even after the expiry of 90 days period from the date of appointment by the board of directors and is not required to be filed with the Registrar, so long as the resolution passed by the board of directors has already been enclosed with the said return.

Procedure for appointment of MD /WTD by the board of directors where no remuneration is being paid

1.	In case of a Private Company which is not subsidiary of a Public Company, the provisions of this section are not applicable and the appointment will be governed as per the Articles of Association of the Company. In case of Public company also check the provision of Articles of Association of the Company.
2.	Convene Board Meeting after giving notice to all the directors [Section 286] to discuss besides others the following matters. · Approve the terms and conditions on which the Managing Director/ Whole Time Director/ Manager is proposed to be appointed.(Resolution) · In case the appointee had not completed the age of 25 years, but has attained the age of majority or had attained the age of 70 years, his appointment had to be approved by a [special resolution] passed in the AGM/EGM and [form No. 23] has to be filed with the ROC.
3.	Inform the Stock Exchange with which shares of the company are listed about the date of this meeting prior to the board meeting. [Clause 19 of the Standard Listing Agreement]
4.	Inform the said Stock Exchange within 15 minutes of the board Meeting, of the outcome of the meeting by letter or fax.
5.	Obtain a [written consent] [Section 264(1)] from the person who is to be appointed as Managerial personnel.
6.	There is no prescribed form for this written consent .
7.	Ensure that the appointment is made in accordance with the conditions specified in [Schedule XIII]
8.	File [e-Form no 23] (in case of Appointment of Managing Director only) within 30 days from the date of Board Meeting.
9.	File [e-form no 32] with the concerned ROC within 30 days from the date of Appointment.
10.	Such Director need to make a [intimation] with in twenty days to the other companies in which he is already a director, Managing Director, manager, Secretary. [Section 305].
11.	File [e-form no 25C] within 90 days from the date of Board Meeting.
12.	Pay the requisite fee through Credit Card / by cash / by cheque in favour of “MCA Collection Account ICICI Bank” at the prescribed rates. [Fee Calculator]
13.	Make necessary entries in the Register of Directors and in the Register of Director’s Shareholding [section 303(1) & 307].
14.	Notify the Stock Exchange with which shares of the Company are listed about the change in the company directors [Clause 30(a) of the Standard Listing Agreement]
15.	The Appointment has to be approved by the Company in the ensuing general meeting.
16.	If you are a listed company, note- That the Board of Directors of the Company shall have an optimum combination of executive and non-executive directors, independent and non-independent directors1

NOTE :

(1)	The appointment and remuneration referred to in Parts I and II of this Schedule shall be subject to approval by a resolution of the shareholders in general meeting.
(2)	The auditor or the secretary of the company or where the company has not appointed a secretary, a secretary in whole-time practice shall certify that the requirements of this Schedule have been complied with and such certificate shall be incorporated in the return filed with the Registrar under sub-section (2) of section 269.

Once the form is filed in relation to the Board resolution, there is no need for filing the form once again after the general meeting or the agreement entered into with the appointee.

DCA Clarification:

Procedure for appointment of MD /WTD by the board of directors where no remuneration is being paid

1.	In case of a Private Company which is not subsidiary of a Public Company, the provisions of this section are not applicable and the appointment will be governed as per the Articles of Association of the Company. In case of Public company also check the provision of Articles of Association of the Company.
2.	Convene Board Meeting after giving notice to all the directors [Section 286] to discuss besides others the following matters. · Approve the terms and conditions on which the Managing Director/ Whole Time Director/ Manager is proposed to be appointed.(Resolution) · In case the appointee had not completed the age of 25 years, but has attained the age of majority or had attained the age of 70 years, his appointment had to be approved by a [special resolution] passed in the AGM/EGM and [form No. 23] has to be filed with the ROC.
3.	Inform the Stock Exchange with which shares of the company are listed about the date of this meeting prior to the board meeting. [Clause 19 of the Standard Listing Agreement]
4.	Inform the said Stock Exchange within 15 minutes of the board Meeting, of the outcome of the meeting by letter or fax.
5.	Obtain a [written consent] [Section 264(1)] from the person who is to be appointed as Managerial personnel.
6.	There is no prescribed form for this written consent .
7.	Ensure that the appointment is made in accordance with the conditions specified in [Schedule XIII]
8.	File [e-Form no 23] (in case of Appointment of Managing Director only) within 30 days from the date of Board Meeting.
9.	File [e-form no 32] with the concerned ROC within 30 days from the date of Appointment.
10.	Such Director need to make a [intimation] with in twenty days to the other companies in which he is already a director, Managing Director, manager, Secretary. [Section 305].
11.	File [e-form no 25C] within 90 days from the date of Board Meeting.
12.	Pay the requisite fee through Credit Card / by cash / by cheque in favour of “MCA Collection Account ICICI Bank” at the prescribed rates. [Fee Calculator]
13.	Make necessary entries in the Register of Directors and in the Register of Director’s Shareholding [section 303(1) & 307].
14.	Notify the Stock Exchange with which shares of the Company are listed about the change in the company directors [Clause 30(a) of the Standard Listing Agreement]
15.	The Appointment has to be approved by the Company in the ensuing general meeting.
16.	If you are a listed company, note- That the Board of Directors of the Company shall have an optimum combination of executive and non-executive directors, independent and non-independent directors1

NOTE :

(1)	The appointment and remuneration referred to in Parts I and II of this Schedule shall be subject to approval by a resolution of the shareholders in general meeting.
(2)	The auditor or the secretary of the company or where the company has not appointed a secretary, a secretary in whole-time practice shall certify that the requirements of this Schedule have been complied with and such certificate shall be incorporated in the return filed with the Registrar under sub-section (2) of section 269.

Once the form is filed in relation to the Board resolution, there is no need for filing the form once again after the general meeting or the agreement entered into with the appointee.

DCA Clarification: