Private company - appointment of md /wtd

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Anil (Querist)

13 September 2014 Is central government's sanction required for PRIVATE Companies for appointment of managing or whole-time directors or managers ?

Ankur Garg

Ankur Garg (Expert)

13 September 2014 Dear Anil,

For appointment of MD and WTD in a private company CG approval is not required. Kindly refer section 196 read with section 197 of CA 2013.

Thanks

Anil

Anil (Querist)

14 September 2014 Thanks for your reply Sir.

Kindly refer below link. This is article in Economic Times dated 12 Sep 2014

https://articles.economictimes.indiatimes.com/2014-09-12/news/53851116_1_new-companies-the-companies-act-corporate-affairs

One of the paragrah in the article says -

The new act withdraws some exemptions and privileges that were available to private companies, including the filing of a declaration of commencement of business and getting the central government's sanction for appointment of managing or whole-time directors or managers.

Kindly let me have your views on this.Thanks

CS Mitesh Mehta

CS Mitesh Mehta (Expert)

15 September 2014 Section 196(4) of the Companies Act, 2013 provides that subject to the provisions of section 197 and Schedule V, a managing director, whole-time director or manager shall be appointed and the terms and
conditions of such appointment and remuneration payable be approved
by the Board of Directors at a meeting which shall be subject to approval
by a resolution at the next general meeting of the company and by the Central Government in case such appointment is at variance to the conditions specified in Schedule V. Approval of the Central Government is not necessary if the appointment is made in accordance
with the conditions specified in Schedule V to the Act.

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