Directors (companies act, 1956)

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Querist : Anonymous

Querist : Anonymous (Querist)

31 October 2012 Sir/mam,

Can a pvt ltd company appoint a director in its Board Meeting?
or it has to first appoint him as additional director and then has to regularise him in General Meeting?

CMA. CS. Sanjay Gupta

CMA. CS. Sanjay Gupta (Expert)
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31 October 2012 1st Appoint him as an additional director and then regularize him in AGM.

Querist : Anonymous

Querist : Anonymous (Querist)

31 October 2012 but is it applicable to a pvt co. also?
Which section u r talking abt?

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)
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31 October 2012 Please refer section 260 of the companies Act,1956.

CMA. CS. Sanjay Gupta

CMA. CS. Sanjay Gupta (Expert)
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31 October 2012 Since the Board may appoint an additional director to hold office till the date of the next annual general meeting, his appointment needs to be appointed as a normal director by way of an ordinary resolution as a special business at the annual general meeting.

The provision for an additional director is one which is meant to enable the companies to have the benefit of the services of a person, who otherwise is suitable for serving on the Board, and whose presence in the Board is desirable in the interests of the company till upto the time the next AGM is held. That provision is not meant to enable the company to keep on its Board a person as additional director for an indefinite period of time by not holding the annual general meeting. Section 260, therefore, must necessarily be read with section 166 which stipulates that the AGM be held every year and not more than fifteenth months shall elapse between the date of one AGM and the next. [Natrajan (P.) v Central Government (2004) 119 Comp Cas 41 (Mad): (2004) 60 CLA 274 (Mad)] e Form 32 for change in the designation of director needs to be filed by the Company electronically to the Registrar within 30 days from the date of general meeting.

Ajay Mishra

Ajay Mishra (Expert)
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31 October 2012 Hi

You are right that the provision of section 257 is not applicable to private company but if the company management or shareholder demand then you can use the provisions of section 257 as a good corporate practice.

You can again appoint him in a Board meeting as additional director for further period upto next AGM.

Querist : Anonymous

Querist : Anonymous (Querist)

31 October 2012 thnx a lot to you all.....

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