Additional director

This query is : Resolved

Vinay B L (Querist)
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19 February 2013 Dear Members,

I have a query regarding regularisation of an Additional Director.

One of the private company appointed Mr. A as an additional director on 28th July 2005, but did not regularise his appointment in the subsequent AGM. (the reference about the regularisation has not been brought in the notice of the AGM as a special business)

Further till the year 2011 the Company has filed all the Annual Returns with the ROC, wherein the designation of Mr. A is shown as "Additional Director" in form 20B (prefill option) but the attached schedule V shows his designation as Director which is signed by the other Directors of the Company.

Since section 260 of the Companies, Act and even the AOA of the Company, restricts the tenure of the Additional Director till the next AGM, Mr. A ceased to be director in the year 2005 only as his appointment was not regularised.

Further the Additional Director has not signed any of the documents, on behalf of the Company, till date. Now the other directors do not want Mr. A to continue as director. Additional Director is not participating in the business of the Company and is not willing to provide the resignation letter.

My queries are as under:
Is there any requirement of including the special business in the notice of the AGM, if the Company does not want to regularise the appointment of the Additional Director?
In the instant case is it sufficient if we file the revised 20B for all the years along with one Form 32 as on the date of AGM of 2005 for vacation of office of Additional Director?
Kindly guide me.

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Thanks and Regards
Vinay B L

CS Ankur Srivastava

CS Ankur Srivastava (Expert)
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19 February 2013 In the above case you need to file form 32 for his regularization w.e.f. the year 2005 i.e. w.e.f. the date of AGM after his appointment.

This will validate all the forms 20B.

Then after you may remove or keep him on the board accordingly.

Vinay B L

Vinay B L (Querist)
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19 February 2013 Dear Sir,

Thank you for the reply. The director is not ready to provide the resignation letter. otherwise I would have suggested the same route. The intention of the management is not to validate the filed forms but to see that the Additional Director goes away from the Board.

Request you to provide me a solution for the said problem.

CS Ankur Srivastava

CS Ankur Srivastava (Expert)
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19 February 2013 But it is not the correct way, in this way your 5 years filing would become incorrect and you have to file file forms 20B again which will also carry heavy filing fee.

Furthermore, you cannot classify it as clarical mistake which you are going to rectify.

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CS Ankur Srivastava

CS Ankur Srivastava (Expert)
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21 February 2013 You have to first file form 32 for his regularization this will validate your filings so far.

Thereafter only 1 issue will left i.e. the removal of director. You may get him removed by passing ordinary resolution under section 284.

Section 283(1)(g) may also serve your purpose.

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