My query is that one of the Director of a private limited company has to be appointed as Manager of the same company. What are the provisions and is any form required to be filed with the ROC or not? What are the relevant sections.
Regulation 82 of Table A provides that subject to the provisions of the Act,— (1) A manager or secretary may be appointed by the Board for such term, at such remuneration and upon such conditions as it may think fit; and any manager or secretary so appointed may be removed by the Board; (2) A director may be appointed as a manager or secretary.
Appointment and remuneration of manager in the case of an independent private company will be governed by the relevant regulations contained in the Articles of Association of the company. In the absence of any provisions in this regard, the appointment shall be made and remuneration shall be fixed in the general meeting of the company.
A director of a company may also be appointed as its manager. In such a case, if the individual ceases to hold office of director for any reason then his office of manager will not come to an end and he will continue to hold the office of manager of the company as per terms of his appointment.
Disqualification for a person to be appointed as a manager Section 385 stipulates that a company shall not appoint or employ, or continue the appointment and employment of, any person as its manager who:— (i) is an undischarged insolvent, or has at any time within the preceding five years been adjudged an insolvent; or (ii) suspends, or has at any time within the preceding five years suspended payment to his creditors; or makes, or has at any time within the preceding five years made, a composition with them; or (iii) is, or has at any time within the preceding five years been, convicted by a court in India of an offence involving moral turpitude. Section 385(2) vests with the Central Government the power to remove the disqualification incurred by any person by virtue of sections 385(1)(a) to 385(1)(c), either generally or in relation to any company or companies, specified in the notification issued in the Official Gazette.
PROCEDURE FOR APPOINTMENT OF MANAGER/WTD/MANAGING DIRECTOR
1. Aboard Meeting shall be convened to decide on the proposal to appoint a particular person as a managing director and also decide provisionally the terms and conditions of the appointment including the remuneration if any, payable to the managing director. 2. The Board decide whether the remuneration payable to MD would be by way of monthly payment or at a specified percentage of the net profit of the company or partly by the one way or partly by the other. 3. A copy of the Board Resolution regarding the appointment should be filed with the ROC in Form-23 within 30 days from the date of passing of such resolution.{ Section 192(1) read with Section 195(4)(c)}. 4. If the appointment is in conformity with the provision of Schedule XIII, a return in Form-25 C must be filed with in 90 days from the appointment with ROC. 5. If the appointment is not in conformity with the procedures of Schedule XIII, approval of the Central Government is required, in the following manner:
a. before any application is made by the company to CG, there shall be issued by or on behalf of the company a general notice to all members indicating the nature of the application proposed to be made. b. The notice is to be published at least once in a regional language newspaper and once in an English newspaper circulating in the district where the registered office of the company is situated. {Section 640B}. c. An application shall be made to CG in Form-25A within 90 days from the date of appointment, together with the fee as per Companies (Fee on Applications) Rules, 1999. d. A copy of the application along with all document (except fees) shall also be forwarded to the ROC. e. In case the appointment is made without remuneration, CG approval’s will still be necessary if the appointment falls outside the provisions of Part I of Schedule XIII.
6. The appointment and remuneration payable to MD require approval of the Shareholders by Ordinary Resolution.{Clause I of Part III of Schedule XIII}. 7. The terms and conditions of the appointment of MD should be incorporated in an agreement executed by him with the company. 8. An abstract of the terms of agreement for the appointment of the MD should be sent to every member of the company within 21 days of entering into agreement.
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