MD Vs. WTD

This query is : Resolved

Guest

Guest (Querist)

22 September 2010 What are the major points of differentiation between a managing director and a Whole time director?

Kindly support with sections.

Also, generally everyone says that a WTD can not be appointed in more than one public / private ltd. company and a MD can be appointed in more than one company sub. to section 316. But, there is no clarificatory restriction in co'a act that a WTD can not be appointed in more than one company.

How to support this statement?

Ajay Mishra

Ajay Mishra (Expert)
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23 September 2010 Dear Friend

The Companies Act 1956 does not obviously indicate the position of Whole-time Director (WTD) very clearly, at least to the extent it does in the case of a Managing director (MD) or Manager who have been defined in Definitions section.

Of course there is an explanation under 269(12) which says " WTD includes a director who is in the whole-time employment of a company", suggesting that a WD can also be one who is not in the whole-time employment of the company!

Then if we look at section 269(1) containing the words " a public company (with prescibed share capital) shall have a managing or whole-time director as if suggesting that MD and WTD are synonimous. 269(2) refers to the appointment of "managing or whole-time director" in accordance with Sch XIII.

PartI(d) of that schedule says "where he is a managerial person (which includes MD, WTD, director or Manager in more than one company "... etc., suggesting that WTD can also be in more than one company!

It is strange, however, that a MD can not be so in more than two companies because of section 316, and such restriction seems to be there in the case of WTD!

Regards
CS Ajay Mishra

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