Reappointment of managing director

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

15 July 2013 Please help,

My company is a public listed company and in this company Appointment of Md was done in 1997 for the perioud of five years which has expired in the year 2002.

Now we want reappointment of MD,will it create an issue if we are doing reappoinment after a long gap i.e. now in the year 2013 ?

Also provide me the procedure of Reappoinment of MD for a public listed co?

Please confirm that CG approval is required for apptmt of MD/reappoinment of Md is required only if the same is not according to Schedule XIII.?

Ajay Mishra

Ajay Mishra (Expert)
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15 July 2013 Hi

As per my knowledge, in case of listed company MD appointment is must. In your case you have not appointed from 2002.

The Companies Act, 1956 does not have any provision for appointment of MD from retrospectively. Because shareholders approval and other intimation is involve.

Ajay Mishra

Ajay Mishra (Expert)
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15 July 2013

PROCEDURE FOR APPOINTMENT OR RE-APPOINTMENT OF MANAGER/WTD/MANAGING DIRECTOR

1. A board Meeting shall be convened to decide on the proposal to appoint a particular person as a managing director and also decide provisionally the terms and conditions of the appointment including the remuneration if any, payable to the managing director.
2. The Board decides whether the remuneration payable to MD would be by way of monthly payment or at a specified percentage of the net profit of the company or partly by the one way or partly by the other.
3. A copy of the Board Resolution regarding the appointment should be filed with the ROC in Form-23 within 30 days from the date of passing of such resolution.{ Section 192(1) read with Section 195(4)(c)}.
4. If the appointment is in conformity with the provision of Schedule XIII, a return in Form-25 C must be filed with in 90 days from the appointment with ROC.
5. If the appointment is not in conformity with the procedures of Schedule XIII, approval of the Central Government is required, in the following manner:

a. before any application is made by the company to CG, there shall be issued by or on behalf of the company a general notice to all members indicating the nature of the application proposed to be made.
b. The notice is to be published at least once in a regional language newspaper and once in an English newspaper circulating in the district where the registered office of the company is situated. {Section 640B}.
c. An application shall be made to CG in Form-25A within 90 days from the date of appointment, together with the fee as per Companies (Fee on Applications) Rules, 1999.
d. A copy of the application along with all document (except fees) shall also be forwarded to the ROC.
e. In case the appointment is made without remuneration, CG approval’s will still be necessary if the appointment falls outside the provisions of Part I of Schedule XIII.

6. The appointment and remuneration payable to MD require approval of the Shareholders by Ordinary Resolution.{Clause I of Part III of Schedule XIII}.
7. The terms and conditions of the appointment of MD should be incorporated in an agreement executed by him with the company.
8. An abstract of the terms of agreement for the appointment of the MD should be sent to every member of the company within 21 days of entering into agreement.

Querist : Anonymous

Querist : Anonymous (Querist)

16 July 2013 Thanks alot sir. So can we go for reappointment of MD backdated that is from 2003 or shall we o for reappoinment of md from the Current date , please guide.

Ajay Mishra

Ajay Mishra (Expert)
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16 July 2013 No, you can not appoint MD from Back date, in Listed company.

Querist : Anonymous

Querist : Anonymous (Querist)

16 July 2013 thanks a lot sir , it really helped me alot

Ajay Mishra

Ajay Mishra (Expert)
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16 July 2013 My Pleasure.........

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