Appointment of md without remuneration in public company

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

13 June 2012 A Public Limited company with paid-up capital more than 5 crore has only 3 directors from it’s incorporation. Now company wants to appoint a Managing Director without remuneration. Can a company do so?

Ajay Mishra

Ajay Mishra (Expert)
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13 June 2012 Hi

Yes, you can do so, the provision of section 269 only provides for appointment of MD and not for paying remuneration.

You are free to appoint MD without any remuneration.

Regards

Querist : Anonymous

Querist : Anonymous (Querist)

13 June 2012 Central Government approval is required in this case? i m little bit confused please clarify and thank you Ajay ji for your reply.

Ajay Mishra

Ajay Mishra (Expert)
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13 June 2012 Hi

If you are not appointing MD through Schedule XIII of the Companies Act, 1956 then you will take approval of CG.

I will suggest you to appoint your MD through Schedule XIII of the Companies Act, 1956.

Regards

Querist : Anonymous

Querist : Anonymous (Querist)

14 June 2012 Sir,

I read Sec. 269 and I got a point Appointment of managing director without remuneration- it says that approval of the CG is necessary even if the MD/WTD is not paid any remuneration, if the case falls within part I of the Schedule XIII. does It means that if a person does not come under the conditions lays down in Part I schedule XIII then CG approval is not required? if I m wrong please clarify.

Regards,

Ajay Mishra

Ajay Mishra (Expert)
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14 June 2012 Hi

Section 269 gives two options to appoint MD/WTD

1. Through CG Approval or
2. Schedule XIII

If you covered under Schedule XIII aand comply all condition then it will be better to appoint under this Schedule otherwise you can appoint him/her with CG approval.

Regards

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