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Duties of the Nominee direcotr/Alternate directors a the year end

The Nominee Director/Alternate Director shall give a notice to the investee company in the prescribed Form 24AA under the Companies (Central Government’s) General Rules & Forms, 1956, at the end of the financial year before March 31 to the effect that he is a Director or a Member of a specified Body Corporate or is a member of a specified firm and is to be regarded as concerned or interested in any contract or arrangement, which may, after the date of notice, be entered into with that body corporate or firm. The form for this purpose is form 24AA
 
 
2]      The Nominee Director/Alternate Director should ensure that he is eligible to be appointed as a director under the provisions of Section 274(1)(g) of the Companies Act, 1956
 
         As per the provisions of Section 274(1)(g) a person shall not be capable of being appointed as a Director of a Company if such person is already a director of a Public Company which (i) has not filed the annual accounts and annual returns for a continuous period of three financial years commencing on and after the first day of April 1999; or (ii) has failed to repay its deposits or interest thereon on due date or redeem its debentures on due date or pay dividend and such failure continues for one year or more
 
Accordingly, every Nominee Director/Alternate Director is required to obtain a confirmation from all the companies in which he is a Director or Alternate Director regarding their compliance with the provisions of Section 274(1)(g) of the Companies Act, 1956 and only after receipt of a confirmation from all the companies in turn confirm to all companies regarding his compliance with Section 274(1)(g). The format for obtaining the declaration under Section 274(1)(g) and giving the declaration are enclosed as
 
 
3]       Number of Directorships:
 
A person appointed as a Nominee Director cannot be a director of more than 15 companies except alternate directorships and directorships of private companies which are not subsidiaries or holding companies of public companies
 

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Category Corporate Law   Report

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