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Appointment of md/wtd or manager

Dip Kd (Company secretary) (77 Points)

01 April 2014

Dear Sirs and friends,

Our company is private limited company and paid up share capital is Rs.37 Crors.As per new companies act 2013 we have to appoint MD.Following are my queries:-

1)comany having CEO ,CFO and CS.It is necessary to appoint MD or WTD?

2) What is the procedure for the same?..

REgards,

Dip

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8 Replies

Jyotika (study study n study) (147 Points)
Replied 01 April 2014

Dear Dip

As per section 203. (1) Every company belonging to such class or classes of companies as may be prescribed shall have the following whole-time key managerial personnel,—

(i) managing director, or Chief Executive Officer or manager and in their absence,

a whole-time director;

(ii) company secretary; and

(iii) Chief Financial Officer :

So in your case as there is CEO already you need not to appoint Md/WTD/Manager.

(In terms of rule 3 of Chapter XIII )A company shall file a return of appointment of a Managing Director, Whole Time Director or Manager, Chief Executive Officer (CEO), Company Secretary and Chief Financial Officer (CFO) within sixty days of the appointment, with the Registrar in Form No. MR.1 along with such fee as may be specified for this purpose.

Regards

Jyotika

Dip Kd (Company secretary) (77 Points)
Replied 01 April 2014

Dear Mam,

Thanks for reply.But the appointment of CFO and CS already done in 2013. So now we have to file the form MR 1??....Any centarl governemnt approval reuired here?

Regards,

Dip

P C Agrawal (Registered independent director Past Chairman of Aurangabad Chapter of ICSI Practicing Company Secretary at Aurangabad) (8229 Points)
Replied 01 April 2014

As per Companies (Appointment & Remuneration of Managerial Personnel) Rules 2014 private companies are not required to appoint KMPs.

Dip Kd (Company secretary) (77 Points)
Replied 01 April 2014

Dear Sir,

I ahve gone through the Appointment and Remuneration of Managerial Personnel) Rules, 2014.In that they have only mentioned the appointment in Listed and Public companies.But section 196 of Companies Act 2013 says that Private company has to appoint MD/WTD or Manager.And as per section 203 of comapnies act 2013 says that If CEO or MD has to appoint and our company having CEO/CFO (one person) and CS also...

Please clerify.....

P C Agrawal (Registered independent director Past Chairman of Aurangabad Chapter of ICSI Practicing Company Secretary at Aurangabad) (8229 Points)
Replied 01 April 2014

Sec.196 only deals with procedure for appointment of MD. It does not provide that it is mandatory for pvt co to appoint MD.

Further, rules framed u/s 203 also provide that private companies are not required to appoint any KMP.

Dip Kd (Company secretary) (77 Points)
Replied 01 April 2014

Thanks for the reply Sir.

Regards,

Dip

The Company Law Desk (CA Practice ) (103 Points)
Replied 17 April 2014

Is the new Companies Act, 2013, troubling you, we are here with a free solution regarding any provisions relating to the practical applicability of this new Act. As per Chapter XIII - Section – 196 –“Appointment of Managing Director(MD), Whole Time Directors (WTD) or Managers” : • Provision relating to appointment of MD/WTD/ Managers shall now also apply to Private Companies. It implies that you need to appoint MD. As per Chapter – I, “Managing Director” means a director who, by virtue of the articles of a company or an agreement with the company or a resolution passed in its general meeting, or by its Board of Directors, is entrusted with substantial powers of management of the affairs of the company and includes a director occupying the position of managing director, by whatever name called. As per this definition CEO/ CFO/ CS cannot be treated as a MD/WTD. Also as per the definition of “officer” includes any director, manager or key managerial personnel or any person in accordance with whose directions or instructions the Board of Directors or any one or more of the directors is or are accustomed to act. But provisions of Key Managerial Personnel do not apply to a Private Company. As per our view there is no compulsion for a Private Company to appoint MD. But Now comes into play “officer who is in default”, for the purpose of any provision in this Act which enacts that an officer of the company who is in default shall be liable to any penalty or punishment by way of imprisonment, fine or otherwise, means any of the following officers of a company, namely:— i. whole-time director; ii. key managerial personnel; iii. No person appointed as (i) or (ii) above then person working at positions (i) and (ii) above will be treated as officer in default if there is any non-compliance. Conclusion: As per our view there is no compulsion for a Private Company to appoint MD. For further details you can visit = www.thecompanydesk.webatu.com or write to us = thecompanydesk @ gmail.com ******its free*** no charges .... For are you waiting for have any query contact us....

diwakar agarwal (trainee) (21 Points)
Replied 19 August 2014

Dear members,

we are going to appoint MD in listed company and he is already director in that company and member of remuneration committe now what to do and procedure should be followed?

reply me fast.

regards