Appointment of nominee directors-section 161(3)

This query is : Resolved

CS Premjith (Querist)
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18 August 2017 Section 161(3) provides that "Subject to the articles of a company, the Board may appoint any person as a director nominated by any institution in pursuance of the provisions of any law for the time being in force or of any agreement or by the Central Government or the State Government by virtue of its shareholding in a Government company."

Query: The Articles of Association of a private limited company does not have any clause regarding the appointment of NOMINEE Directors. However, there are no restrictions in the AoA regarding such appointments. The sub section starts with a condition that " Subject to the articles of a company, the Board may......".

Does this mean that the company should first alter its AoA and add an enabling provision in it to appoint a NOMINEE director?

ANY interpretations in this regard?

CA Suresh Jain

CA Suresh Jain (Expert)
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18 August 2017 It is normally not necessary, but the exact comment can only be made after seeing the provisions of AoA about appointment of Directors
N Jain
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