According to sec 268 of the Companies Act 1956 in the case of a Public Company or a Company subsidiary of Public Company the terms of appointment of MD/WTD/NRD can be revised, whether the condition is given in the Companies MOA or AOA or in the agreement of appointment, but it should not have any effect unless approved by the Central Government.
Procedure for varying the terms of Appointment are described as followes:
1) Sec 268 is applied only in case of Public Company and Private Company which is subsidiary of public Company.
2) First of all a Board Meeting should be properly held to decide to make changes in the terms and condition of appointment of director.
3) Issue a general notice to all the member indicating the changes to be made and also arrange for publication of same atleast once in local language of the area of the Registered office of the Company. After publication an application is required to be submitted to the Central Government to obtain approval.
4) Prepare a draft of the proposed changes in the agreement.
5) Board Meeting is required to held to approve the draft and also to issue notice of general meeting .
6) If the Company is listed than three copy of the notice is required to send to the Stock Exchange in which Company is listed.
7) If the AOA required any amendment then such amendment is to be done by special resolution.
8) Application to Central Government should in e-form 25B along with the following document :
a) Copy of resolution approve the changes in general meeting.
b) Copy of the news paper clippings in which notice as per sec 640B has published.
c) In case of any loan subsist then NOC from the loan provider.
d) Any other information if think important.
9) An copy of the same application along with the same document sent to the Central Government is also required to submit to ROC.
10) Copy of the Special resolution is required to registered with the ROC in e-form 23.
After fulfilling all the above formalities the changes made in the agreement become effective.
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