Executive director

This query is : Resolved

NEHA MISHRA (Querist)
Follow

29 July 2013 Dear Sir,
Pls clarify that a Managing/Wholetime/Executive Director in Public Ltd. Co can be Executive Director in other Co. including Pvt. Co. Can a Executive Director in PLC can become Executive Director in Pvt. Co also. Its urgent Pls guide.

Ajay Mishra

Ajay Mishra (Expert)
Follow

29 July 2013 Hi

Yes, a MD can be MD in other Company if such company is under same management/group companies.

A person who is MD in two companies can be MD in other company with the approval of CG.

Section 316 does not apply to a private company. Hence, a person may be appointed as a managing director of more than two private companies and no permission of the Central Government is required to be obtained in this regard. [DCA Notification No. GSR 577(E), dated 16-7-1985]

Ajay Mishra

Ajay Mishra (Expert)
Follow

29 July 2013
Appointment of an individual as a Managing Director who is already Managing Director or Manager of another company
A public company or a private company which is a subsidiary of a public company may appoint or employ a person as its managing director, if he is already the managing director or manager of one, and of not more than one, other company (including a private company which is not a subsidiary of a public company). The condition for appointment is that the appointment or employment is made or approved by a resolution passed at a meeting of the Board with the unanimous consent of all the directors present at the meeting and of which meeting the resolution to be moved thereat, specific notice has been given to all the directors then in India. [Section 316(2)]

In such case the provisions of section 190 shall apply as regards to the giving of special notice of the meeting and of resolution to be moved thereat in case. The notice must specifically mention the business to be transacted at the meeting and contain proposed resolution to be passed at the meeting.

The Central Government may, by order, permit any person to be appointed as a managing director of more than two companies, if the Central Government is satisfied that it is necessary that the companies should, for their proper working, function as a single unit and have a common managing director.

You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now