Under the
Companies Act, 2013, the provision for
appointment of Managing Director is same for both public and private Limited Companies.
Section 196 clearly states this.
Main
requirements and procedure for the appointment of Managing Director under the
new Companies Act are given below (applicable to all companies):
1.
No company shall appoint or re-appoint any person as its managing
director, whole-time director or manager for a term exceeding five years at a
time;
2.
He should have attained the age of 21 years;
3.
He should not attained the age of 70 years (has attained the age
of seventy years may be made by passing a special resolution in which case the
explanatory statement annexed to the notice for such motion shall indicate the
justification for appointing such person;
4.
He should not be an
undischarged insolvent or has at any time been adjudged as an insolvent;
5.
He has not at any time suspended payment to his creditors or
makes, or has at any time made, a composition with them;
6.
He has not at any time been convicted by a court of an offence and
sentenced for a period of more than six months.
7.
Board can appoint the Managing Director, subject to the approval
of members.
8.
If appointment is not in accordance with Schedule V of the Act,
then approval of Central Government is required;
9.
The general meeting (not Annual General meeting) to be held after
such Board meeting should approve such appointment of Managing Director by way
of a resolution (ordinary Resolution is sufficient);
10.
A notice convening Board or general meeting for considering such appointment
shall include the terms and conditions of such appointment, remuneration payable
and such other matters including interest, of a director or directors in such appointments,
if any;
11.
A return in the prescribed form shall be filed within sixty days
of such appointment with the Registrar.
Section 197 of the new Act speaks
about the managerial remuneration. But this section is applicable to public
companies.
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