CS Ekta (Company Secretary) (309 Points)
26 July 2010Hi Friends,
In case of a private company which is a subsidiary of a public company, the additional directors are appointed and all the existing directors have resigned.
Do we need to regularise the additional directors before the AGM to comply with section 256?
Besides, do the Additional Directors ceases to hold office at the commencement of the AGM? If yes, how business will be transacted at the AGM?
Ankur Garg
(Company Secretary and Compliance Officer)
(114773 Points)
Replied 26 July 2010
No need or compulsion to regularise the additional directors before the AGM.
However you may do so through an EGM. Further section 256 dealing with rotational retirement of director is not applicable to a private company.
Thanks
CS Ekta
(Company Secretary)
(309 Points)
Replied 26 July 2010
Both Section 255 & 256 is applicable in case of Private Company which is a subsidiary of a public company
Ankur Garg
(Company Secretary and Compliance Officer)
(114773 Points)
Replied 26 July 2010
Yup...i missed it.
you may first regularise them in the AGM and then comply section 256 by rotationally retiring and re-appointing them. Manage the agenda items accordingly.
Alternatively for administrative convenience you may regularise them through an EGM and then follow the regular AGM procedure. Hope m not missing anything. Wait for other opinions also. Revert with conrtadicting views, if any.
Vaibhav Shukla
(Company Secretary)
(142 Points)
Replied 27 July 2010
Dear Ekta,
I agree with Ankur u can go for regularisation of the Additional Directors in the EGM and than Follow the AGM Procedure.
CS Ankur Srivastava
(Company Secretary & Compliance Officer)
(17848 Points)
Replied 27 July 2010
Yes, agree with Mr. Ankur and Vaibhav, but you have to regularise all them before the date of AGM because on the date of AGM all of them cease to be the director. So you have no option but to regulatise them before the date of AGM.
CS Ekta
(Company Secretary)
(309 Points)
Replied 27 July 2010
Thanks all of you for your replies.
I would like to discuss one more situation.
Suppose, the subsidiary pvt co has 2 directors, one of them is additional. In that case, only the regular director will be considered for the applicability of sec 255 & 256.
In this case, the regular director shall retire from office, right?
Therefore again in this case, we have to regularise the additional director before the AGM.
Please give your opinions.
Regards
Ekta
CS Ankur Srivastava
(Company Secretary & Compliance Officer)
(17848 Points)
Replied 28 July 2010
Dear Ekta,
Regular director would be reappointed and then the additional director would be regularised in the same general meeting there would be no problem.
There is no need to regularise him before the AGM.
CS Ekta
(Company Secretary)
(309 Points)
Replied 28 July 2010
then that implies that the AGM will be commenced with only one Director in board at that time?
Ankur Garg
(Company Secretary and Compliance Officer)
(114773 Points)
Replied 28 July 2010
| Originally posted by : CS Ekta | ||
 |
commenced with only one Director in board |
 |
Dear learned members ---- just try and be practical and do not stretch the problems like corporate law coaching class rooms.
Would request you to avoid adoption of literal interpretation of word “commencement” used in section 260 read with DCA clarification.
And if you are not confident enough…then why don’t you increase the strength of your board by appointing someone directly in the GM…????????
Avoid the route of section 260 to increase the Board strength….and directly appoint the person through GM u/s 257 (section 257 is not applicable to private company)…especially where:
1. the question is for a private company…
2. director and shareholders are same…
3. Holding GM is quite possible…
Nothing personal and just a humble suggestion…Try and find out a permanent solution ---not for current assignment but for whole professional journey…
Best Regards
CS Ekta
(Company Secretary)
(309 Points)
Replied 28 July 2010
All this discussions are meant for dealing with practical problems, coaching class rooms normally dont deal with the practical problems.
I know very well that holding GM is not a problem.
what the harm in trying to approach the problem from all the angles and gathering more knowledge?
there is nothing wrong in clearing the doubts and have the answers
Ankur Garg
(Company Secretary and Compliance Officer)
(114773 Points)
Replied 28 July 2010
Hey Ekta...Please do not mind yaar...it was just a thought...u know i believe in long discussions...anyways i am sorry...
CS Ekta
(Company Secretary)
(309 Points)
Replied 28 July 2010
Hey , Its alright.........however coming from you was a surprise, since I know you like discussion & solving the issues.
Hina Sadrani
(c S)
(32 Points)
Replied 29 July 2010
Ekta, in my opinion, a Chairman is required to conduct the business of AGM/EGM. If there is a Board Chairman, he will preside the GM unless otherwise provided in AOA. If there is no Board Chairman or he is not present within specified time, members can appoint any member to chair the meeting. Hence, in my opinion, vacancy in Board for a time being (i. e. during AGM/EGM) will not have any impact on the conduct of the business of AGM /EGM.
Views of other learned members are solicited.
Best regards...
esha
(trainee)
(192 Points)
Replied 10 December 2010
Hmm.. I have read all reviews in thisregard but would like to add some thing here, as many of my friends have suggested that in the given company they can regularise additional director by EGM also. Can anyone provide me with some case law, circular that can prove this point that Whether Additional Director be regularised in EGM? (in case of Public Company)?
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