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Director

06 September 2012

A private company hired an experienced person for using his experience in the operations of company and wants to give him the designation "Director-Operations". this designation will be printed on his visiting card and on every future correspondence he would made on behalf of company. Can company do so without legal formalities of Companies Act?

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5 Replies

CS. DISHA SHAH (Properitor of D. M. SHAH & CO. COMPANY SECRETARY) (394 Points)
Replied 06 September 2012

Hello

Company is required to file e-Form - 32 for his appointment as a director not else is required as per Company Law.

Aditya Soni (CS Final Student Trainee) (727 Points)
Replied 06 September 2012

Dear Shubhani,

Please see the following provision if applicable:

Shadow' or 'Deemed' director

Explanation to section 303(1) says that any person in accordance with whose directions or instructions, the Board of directors of a company is accustomed to act shall be deemed to be a director of the company.

Same provisions of the Companies Act, 1956 also applies to a 'Shadow director' being person in accordance with whose directions or instructions the Board of directors of the company is accustomed to act. However, if the Board of directors acts on advice given by a person in his professional capacity he will not be considered as a deemed or shadow director of the company.

But as far as the designation is concerned, that can not be given without fulfilling the formalities.

Regards,

Aditya.

CS Ankur Srivastava (Company Secretary & Compliance Officer) (17848 Points)
Replied 11 September 2012

If you want to designate him as Director, you need to appoint him as director and file form 32 accordingly, otherwise you can use any designation as manager, operations or any designation.