Executive director appointment agreement

CS Ankur Srivastava (Company Secretary & Compliance Officer) (17848 Points)
Replied 10 January 2012

It is just to fix the detailed tems and conditions of appointment and remunerations. The format is as under:

Draft Resolution:

“RESOVLED THAT subject to the provisions of Section 198, 269 & 309 read with Schedule XIII and other applicable provisions of the Companies Act, 1956, if any, the consent of the Company be and is hereby accorded to the appointment of Shri ............................. as Director for 3 years on the following terms and conditions :-

I. Remuneration : Rs. ................./- – Rs. ............./- – Rs. ........../- per month

II. Self Development Allowance : Rs. ............/- per month.

IlI. Perquisites : Perquisites shall be allowed in addition to salary as under. However, these shall be restricted to an amount equal to the annual salary, subject to an overall ceiling as mentioned herein- after :-

Category - ‘A’

i) House Rent Allowance :

House Rent Allowance shall be .........% of salary. The Company shall provide such furniture and furnishing as may be required by him. Further the expenditure incurred by the Company on gas, electricity, water and furnishings shall be valued as per the Income Tax Rules, 1962.

ii) Medical Reimbursement :

Reimbursement of actual medical expenses incurred for self and family in India and/or abroad including hospitalization, subject to a ceiling of one month’s salary in a year or three months’ salary over a period of 3 years.

iii) Leave Travel Concession :

For self and family once in a year to any place in India or abroad subject to ceiling of one month’s salary.

iv) Club Fees :

Fees of club subject to maximum of two clubs. No admission and life membership fee will be paid.

v) Personal Accident Insurance :

Personal Accident Insurance of an amount, the annual premium of which shall not exceed Rs. ............../-.

Category – ‘B’

i) Company’s contribution towards Provident Fund as per the Rules of the Company but not exceeding limits as prescribed under the Government regulations from time to time.

ii) Company’s contribution towards Superannuation Fund as per the rules of the Company, but it shall not together with the Company’s contribution to Provident Fund, exceed 25% of the salary. Contribution to Provident Fund and Superannuation Fund not be included in computation of the ceiling on perquisites to the extent these, either singly or put together are not taxable under the Income Tax Act, 1961.

iii) Gratuity as per the rules of the Company, but shall not exceed half month’s salary for each completed year of service.

iv) Encashment of leave at the end of tenure of service will not be included in the computation of the ceiling on perquisites.

v) He will not be entitled to any sitting fees for attending the meeting of the Board of Directors or Committees thereof.

Category – ‘C’

i) He will be entitled to free use of Company’s Car with driver for official as well as personal purpose.

ii) The Company shall provide him mobile phone and telephone, and other communication facilities at residence and these will not be considered as perquisites.”

“RESOLVED FURTHER THAT in the event of absence or inadequacy of profits in any financial year, the remuneration payable to Shri ......................, by way of salary, allowances and perquisites, shall not exceed the maximum limits as prescribed under schedule XIII of the Companies Act, 1956.”

“RESOLVED FURTHER THAT Shri .................... and Shri ................... Directors of the Company be and are hereby jointly and / or severally authorised to do all such acts, deeds and things as may be expedient, desirable and necessary to give effect to the above resolution.”

2 Like

CA Seema Kochar (CHARTERED ACCOUNTANT) (636 Points)
Replied 10 January 2012

Ankur sir please provide the agreement specimen..

CA Seema Kochar (CHARTERED ACCOUNTANT) (636 Points)
Replied 10 January 2012

Ankur sir please provide the agreement specimen..

CS Ankur Srivastava (Company Secretary & Compliance Officer) (17848 Points)
Replied 10 January 2012

The above is treated as agreement for a fix period.

(Guest)

AGREEMENT BETWEEN A COMPANY AND ITS WHOLE-TIME DIRECTOR

An Agreement made at Jaipur this 01^st day of January 2010

Between

XYZ Private Limited, a Company within the meaning of Section 3(1) (i) of the Companies Act, 1956 and having its Registered Office at SB – 93, Jawahar Lal Nehru Marg, Bapu Nagar, Jaipur in the State of Rajasthan (hereinafter called 'the Company') on the FIRST PART

and

Mrs. X Prakash W/o Mr. Y Prakash aged 45 years, Indian inhabitant, presently residing at Satya Villa, SB – 93, Jawahar Lal Nehru Marg, Bapu Nagar, Jaipur, in the State of Rajasthan (hereinafter called the 'Whole- Time Director') on the SECOND PART

AND WHEREAS pursuant to the powers conferred under the Articles of Association of the Company and applicable provisions of the Companies Act, 1956 the members of the Company has at its general meeting held on 01^st January, 2010 appointed Mrs. X Prakash as the Whole- time Director of the Company for life time with effect from 1^st January 2010 upon the terms and conditions set out hereunder and Mrs. X Prakash has accepted the said terms and conditions of the appointment

NOW THEREFORE, IT IS HEREBY AGREED BY AND BETWEEN THE PARTIES HERETO AS FOLLOWS:

Mrs. X Prakash has been appointed as the Whole- Time Director of the company with effect from 01^st January 2010 for life time.

The Whole- Time Director shall exercise and perform such powers and duties as the Board of directors of the company (hereinafter called “the Board”) shall, from time to time, determine, and subject to any directions and restrictions, from time to time, given and imposed by the Board and further subject to the superintendence control and direction of the Board, she shall have the general control, management and superintendence of the business of the company with power of appoint and to dismiss employees and to enter into contracts on behalf of the company in the ordinary course of business, she may consider necessary or proper or in the interest of the company, provided however, that nothing shall be done by the Whole- Time Director which by resolution or which shall not be effective unless approved by Board or which are not expressly provided.

Without prejudice to the generality of the power hereinabove the Whole- Time Director shall be entitled to exercise the following powers:

With the Board’s approval, together with the person in charge of finance for the time being of the company and other person authorized by the Board, to open and operate any banking or other account and to draw, make, accept, execute, endorse, discount, negotiable, retire, pay, satisfy and assign cheques, drafts, bills of exchange, promissory notes, hundis, interest and dividend warrants and other negotiable of transferable instruments or securities.

To Borrow moneys with or without security, for the purpose of business of the company, to such maximum limit as the Board may impose from time to time while giving its approval.

To ensure that all taxes due to the Central and state Governments and Municipal authorities are paid promptly.

To engage persons in the employment of the company.

To increase the salary or remuneration of any employee of the company and to sanction annual increase.

To enter into contracts for the purchase of goods for the company subject to prior approval of the Board of directors in terms of sections 297 and 299 of the companies Act 1956, wherever necessary.

To institute prosecute, defend, oppose, appear or appeal to, compromise, refer to arbitration, abandon, and execution, become non-suited in any legal proceedings including trade marks, trade names, trade property and passing off actions and revenue proceedings relating to customs or excise duties, tax on income, profits and capital and taxation generally or otherwise.

The Whole- Time Director shall throughout the said term, devote her entire time, attention and abilities to the business of the company and shall carry out the orders, from time to time, of the Board and in all respect conform to and comply with the directions and regulations made by the Board, and shall faithfully serve the company and use her utmost endeavors to promote the interests of the company.

The Company shall pay to the Whole Time Director during the continuance of this agreement in consideration of the performance of his duties:-

Remuneration:

Salary may be decided by Board of Directors from time to time at their discretion subject to maximum of Rs. 50,000/- (Rupees Fifty Thousand only) per month.

The Whole- Time Director shall not, during the period of her employment and without the previous consent in writing of the Board, engage or interest herself either directly or indirectly in the business or affairs of any other person, firm, company, body corporate or in any undertaking or business of a nature similar to or competing with the company’s business and further, shall not, in any manner, whether directly or indirectly use, apply or utilize her knowledge or experience for or in the interest of any such person, firm, company or body corporate as aforesaid or any such competing undertaking or business as aforesaid.

The Whole- Time Director shall not during the continuance of her employment with the company, divulge or disclose to any person, firm, company or body corporate whomsoever or make any use whatever for her own or for whatever purpose, of any confidential information or knowledge obtained by her during her employment as to the business or affairs of the company or as to any trade secrets or secret processes of the company and the whole- time director shall, during the continuance of her employment hereunder, also use her best endeavors to prevent any other person, firm, company or body corporate concerned from doing so.

Either party shall terminate this agreement by giving to the other advance notice of one month, provided that the company may waive the notice by giving in cash the remuneration for three months that the whole- time director would have received had she remained in office for the said three months.

The Whole- Time Director shall, from time to time, during her employment hereunder fully disclose to the company the progress of investigations and any discoveries she may make herself or in conjunction with other officials or non-officials with regard to any improvement, invention or discovery arising out of in connection with the said employment, she shall forthwith disclose to the company a full and complete descripttion of the nature of said improvement, invention or discovery and the mode of performing the same.

This agreement and the terms & conditions hereof shall be subject to the approval of the shareholders of the company in general meeting.

IN WITNESS WHEREOF, the parties hereto have set their hands on the day, month and the year above written.

For and on behalf of the company,

Y Prakash X Prakash

(Managing Director) (Whole Time Director)

Witness: 1.

2.

2 Like

Bankim Shah (Proprietor) (24 Points)
Replied 27 January 2012

Is there any limitation or restriction on the amount of remuneration for whole time director/executive director in a pvt ltd company, irrespective of the fact that the company is making profit or loss ?

Apart from passing the resolution, is there any other requirement in respect of ROC ? Any form filing etc. ?

(Guest)

Dear Mr. Shah,

There is no restriction on amount of remuneration for whole time director/executive director in a pvt ltd company, irrespective of the fact whether company is making profit or loss.

You will also have to file Form 32 for change in designation with ROC and Form 23 if SR is passed in GM.

Bankim Shah (Proprietor) (24 Points)
Replied 27 January 2012

Thank you very much for the quick answer. Just to confirm further, Is form 32 required to be filed, even if the existing director is appointed as whole time director/executive director ?

Is SR mandatory in appointing whole time director or we have to go by MOA/AOA ?

(Guest)

1. Form 32 is required to be filed, even if the existing director is appointed as whole time director for change in designation from director to WTD.

2. SR is not mandatory to be passed. Check provisions of AOA for the same.

Utsav (Owner) (95 Points)
Replied 08 June 2012

Hello,

I am sorting out two matters in which i need your help :

1. Increase in Authorised Capital and further alloting the same for cash -

The procedure that i am about to do is , to hold Board Meeting - pass ordinary resolution to increase Authorised capital, Hold General meeting - pass special resolution to increase Authorised capital, File Form 5, Form 2 and form 23 for special resolution. Am i going coreectly, do i need to pass any resolution for allotment of the increased authorised capital. - Please suggest.

2. Remuneration to Executive Director

Its a Pvt. Ltd Company - 2 Executive Director - filled form 32 at the time of incorporation - Remuneration was not fixed at the first Board Meeting - now I wanna fix the remuneration for both the existing executive director. What is the procedure that i have to follow. Please also mention the limit for remuneration if any.

Attached File : 630458 993163 aoa eapl.pdf downloaded: 191 times

RAJEEB CHOUDHURY (CS) (36 Points)
Replied 13 July 2015

Originally posted by : Neha Jain
	The Whole-time Director or Managing Director of any Company (except Pvt. Ltd ) cannot be appointed for more than Five (5) years. AGREEMENT BETWEEN A COMPANY AND ITS WHOLE-TIME DIRECTOR An Agreement made at Jaipur this 01st day of January 2010 Between XYZ Private Limited, a Company within the meaning of Section 3(1) (i) of the Companies Act, 1956 and having its Registered Office at SB – 93, Jawahar Lal Nehru Marg, Bapu Nagar, Jaipur in the State of Rajasthan (hereinafter called 'the Company') on the FIRST PART and Mrs. X Prakash W/o Mr. Y Prakash aged 45 years, Indian inhabitant, presently residing at Satya Villa, SB – 93, Jawahar Lal Nehru Marg, Bapu Nagar, Jaipur, in the State of Rajasthan (hereinafter called the 'Whole- Time Director') on the SECOND PART AND WHEREAS pursuant to the powers conferred under the Articles of Association of the Company and applicable provisions of the Companies Act, 1956 the members of the Company has at its general meeting held on 01st January, 2010 appointed Mrs. X Prakash as the Whole- time Director of the Company for life time with effect from 1st January 2010 upon the terms and conditions set out hereunder and Mrs. X Prakash has accepted the said terms and conditions of the appointment NOW THEREFORE, IT IS HEREBY AGREED BY AND BETWEEN THE PARTIES HERETO AS FOLLOWS: Mrs. X Prakash has been appointed as the Whole- Time Director of the company with effect from 01st January 2010 for life time. The Whole- Time Director shall exercise and perform such powers and duties as the Board of directors of the company (hereinafter called “the Board”) shall, from time to time, determine, and subject to any directions and restrictions, from time to time, given and imposed by the Board and further subject to the superintendence control and direction of the Board, she shall have the general control, management and superintendence of the business of the company with power of appoint and to dismiss employees and to enter into contracts on behalf of the company in the ordinary course of business, she may consider necessary or proper or in the interest of the company, provided however, that nothing shall be done by the Whole- Time Director which by resolution or which shall not be effective unless approved by Board or which are not expressly provided. Without prejudice to the generality of the power hereinabove the Whole- Time Director shall be entitled to exercise the following powers: With the Board’s approval, together with the person in charge of finance for the time being of the company and other person authorized by the Board, to open and operate any banking or other account and to draw, make, accept, execute, endorse, discount, negotiable, retire, pay, satisfy and assign cheques, drafts, bills of exchange, promissory notes, hundis, interest and dividend warrants and other negotiable of transferable instruments or securities. To Borrow moneys with or without security, for the purpose of business of the company, to such maximum limit as the Board may impose from time to time while giving its approval. To ensure that all taxes due to the Central and state Governments and Municipal authorities are paid promptly. To engage persons in the employment of the company. To increase the salary or remuneration of any employee of the company and to sanction annual increase. To enter into contracts for the purchase of goods for the company subject to prior approval of the Board of directors in terms of sections 297 and 299 of the companies Act 1956, wherever necessary. To institute prosecute, defend, oppose, appear or appeal to, compromise, refer to arbitration, abandon, and execution, become non-suited in any legal proceedings including trade marks, trade names, trade property and passing off actions and revenue proceedings relating to customs or excise duties, tax on income, profits and capital and taxation generally or otherwise. The Whole- Time Director shall throughout the said term, devote her entire time, attention and abilities to the business of the company and shall carry out the orders, from time to time, of the Board and in all respect conform to and comply with the directions and regulations made by the Board, and shall faithfully serve the company and use her utmost endeavors to promote the interests of the company. The Company shall pay to the Whole Time Director during the continuance of this agreement in consideration of the performance of his duties:- Remuneration: Salary may be decided by Board of Directors from time to time at their discretion subject to maximum of Rs. 50,000/- (Rupees Fifty Thousand only) per month. The Whole- Time Director shall not, during the period of her employment and without the previous consent in writing of the Board, engage or interest herself either directly or indirectly in the business or affairs of any other person, firm, company, body corporate or in any undertaking or business of a nature similar to or competing with the company’s business and further, shall not, in any manner, whether directly or indirectly use, apply or utilize her knowledge or experience for or in the interest of any such person, firm, company or body corporate as aforesaid or any such competing undertaking or business as aforesaid. The Whole- Time Director shall not during the continuance of her employment with the company, divulge or disclose to any person, firm, company or body corporate whomsoever or make any use whatever for her own or for whatever purpose, of any confidential information or knowledge obtained by her during her employment as to the business or affairs of the company or as to any trade secrets or secret processes of the company and the whole- time director shall, during the continuance of her employment hereunder, also use her best endeavors to prevent any other person, firm, company or body corporate concerned from doing so. Either party shall terminate this agreement by giving to the other advance notice of one month, provided that the company may waive the notice by giving in cash the remuneration for three months that the whole- time director would have received had she remained in office for the said three months. The Whole- Time Director shall, from time to time, during her employment hereunder fully disclose to the company the progress of investigations and any discoveries she may make herself or in conjunction with other officials or non-officials with regard to any improvement, invention or discovery arising out of in connection with the said employment, she shall forthwith disclose to the company a full and complete descriptttion of the nature of said improvement, invention or discovery and the mode of performing the same. This agreement and the terms & conditions hereof shall be subject to the approval of the shareholders of the company in general meeting. IN WITNESS WHEREOF, the parties hereto have set their hands on the day, month and the year above written. For and on behalf of the company, Y Prakash X Prakash (Managing Director) (Whole Time Director) Witness: 1. 2.