Additional director or director in gm

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Querist : Anonymous

Querist : Anonymous (Querist)

13 June 2012 In a private limited Company, there are two directors. now one director wants to resign from the post of director. so there is need to appoint other person as a director before his resignation.
now my question is, in this case, is it ok to appoint additional director or we need to take EGM for that?
because after appointment of additional director, there will be only one director and one additional director.
or we have to appoint him in GM so he will be appointed as a normal director?
what are the powers of a director?

CS Mitesh Mehta

CS Mitesh Mehta (Expert)
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13 June 2012 You can appoint additional director in Board Meeting. A legal position or status of additional director is the same as if as a normal director. However Additional director need hold up to the date of next AGM.

ARUN KUMAR MAITRA

ARUN KUMAR MAITRA (Expert)
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13 June 2012 Even a single director can appoint additional director,though qurum reqd. to hold a meeting is presence of atleast two
persons.Zimmers Ltd. v. Zimmer(1951)WN600 and Ranboxy Laboratories Ltd. v. Dr. Jayaram Chigurupati(2010)153 Com Cases162:(2010)95 CLA 322(CLB) vide page 3364 in Part VI in Ramaiya'a Guide to the Companies Act.
Therefore, in the instant case ,the vacancy can be filled up even after the resignation of the director.However, appointment of Additional Director must be authorised by the Articles of Association of the Company.Otherwise, you shall have to hold EGM to fill the vacancy.

Ajay Mishra

Ajay Mishra (Expert)
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13 June 2012 Hi

As per section 252 the private company have minimum two directors and if the company have less than two director in any time the Board has power to appoint other director to maintain the provision of section 252.

In your case you have power to appoint firstly additional director as per section 260 and then resign the director who want to resign. The additional director will be treated as director in all respect.

so no need to call EGM for this u can take the benefit of the provision of section 262.

Regards

Querist : Anonymous

Querist : Anonymous (Querist)

13 June 2012 thank you very much, Mitesh sir, Arun Sir and Ajay sir for your valuable reply.

ARUN KUMAR MAITRA

ARUN KUMAR MAITRA (Expert)
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13 June 2012 Dear Ajay Mishra Ji,

Additional Director can be appointed by the Board subject to such power conferred on it by the AoA vide Section 260.Therefore, in the instant case, if there is no such provision in the AoA of the Company, then alternative course would be to convene EGM to appoint one more director to meet the statutory minmum.

Ajay Mishra

Ajay Mishra (Expert)
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13 June 2012 Hi Arun,

In above mentioned query, he is not asking about the provision requires in AOA or not. Please confirm if i am wrong.

My response is according to their query.

ARUN KUMAR MAITRA

ARUN KUMAR MAITRA (Expert)
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14 June 2012 Dear Ajay Ji,

Kindly note that the querist has not mention, whether there is any provision in their AoA to appoint the Additional Director.That's why I intended to state that ,his Company can appoint Additional Director provided it has power as per its AoA.Otherwise,it has to call an EGM to overcome the problem.

I fully agreey with your valuable comments. My only suggestion is that the requirement of the provisions in the AoA should also be brought to his notice ,so that, he can advice his management to take appropriate action in the matter. I hope now you will appreciate it.My intention is to share my knowledge with you,so that both of us can benefitfrom it.

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ARUN KUMAR MAITRA

ARUN KUMAR MAITRA (Expert)
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