Appointment of managing director

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Querist : Anonymous

Querist : Anonymous (Querist)

15 February 2016 Dear All,

Can a Managing director be appointed as Non-executive. For example in one company Mr. X is appointed as a MD (Execuitve) and in another company as Non executive MD.

An early reply is highly appreciated.

Thanks & Regards,

Ganeshbabu K

Ganeshbabu K (Expert)

16 February 2016 Section 203(3) of company act 203,

A person, who is managing director of one company, may be appointed as a managing director or manager of not more than one another company, if following conditions are satisfied,

(i) An appointment is approved by UNANIMOUS RESOLUTION of board of another company with consent of all directors present at meeting.
(ii) SPECIFIC NOTICE is given to ALL DIRECTORS IN INDIA.
(iii)Specific notice should state that such resolution shall be moved at the board meeting.

Therefore, it is clear from above clarification that “A PERSON CAN BE A MANAGING DIRECTOR IN TWO COMPANIES”.

Querist : Anonymous

Querist : Anonymous (Querist)

18 February 2016 Dear Sir,

Thanks for your reply.

My basic question is whether we can appoint MD as non executive or not.?

Please reply.

Thanks

CS Divesh Goyal

CS Divesh Goyal (Expert)

28 February 2016 No MD cant be appoint as non executive. Reason:
as per definition of executive director includes whole time employee of the Company and MD is whole time employee to the Company.

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