Whole time director

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Querist : Anonymous

Querist : Anonymous (Querist)

23 July 2013 The Board of Directors of a Private Ltd Co appointed a Whole Time Director directly (who was not an existing director) for a period of 2 years. Please clarify
In the ensuing AGM,
i. whether the WTD needs to be re-appointed as Director (to continue as WTD)
ii. If so, whether any form 32 needs to be filed for any change in designation

Thanks in advance

Ajay Mishra

Ajay Mishra (Expert)
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23 July 2013 Hi

As per section 269 of the Act, a whole-time director includes a director in the whole-time employment of the company. In other words, a director who devotes his whole time to the affairs of a company is called a whole-time director of the company. A whole-time director of a company cannot accept the position of a whole-time director in other companies, though he may accept office of non-whole-time director in other companies subject to the limits imposed by section 275 read with sections 277 and 278.

So firstly you appoint him as director, then you appoint as WTD.

The provision of section 269 is not applicable to private limited company.

Ajay Mishra

Ajay Mishra (Expert)
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23 July 2013
A person, who is proposed to be appointed as a managing director or whole-time director, unless he is already a director in the company, cannot be appointed as such. Holding of office of director is a pre-requisite for holding of office of managing or whole-time director. Even if the approval of the Central Government has been obtained for appointment of a person as managing or whole-time director, the requirement of holding of office as a director cannot be dispensed with.

If a company intends to appoint an individual, who is not a director of the company, as its managing or whole-time director then he shall have to be first appointed by the Board as an additional director. The appointment of a person as an additional director is governed by the provisions of section 260 and the regulations contained in the Articles of the company.

Ajay Mishra

Ajay Mishra (Expert)
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23 July 2013
If a person while he was the additional director of a company had been appointed as the managing or whole-time director, the later appointment also ceases simultaneously with the cessation of his directorship at the commencement of the annual general meeting. However, if such a person is re-elected as full-fledged director at the annual general meeting and thereby he continues as a director of the company, he shall continue as a managing or whole-time director also for the period for which he is so elected by the annual general meeting.

Querist : Anonymous

Querist : Anonymous (Querist)

23 July 2013 Dear Ajay,

Thanks for your reply.

Please clarify how form 32 needs to be filed
i. at the time of appointing him as WTD(for change in designation as WTD)
ii. on re election by AGM

Thanks

Ajay Mishra

Ajay Mishra (Expert)
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23 July 2013 You have not read my replies.

Your appointment of WTD is not valid.So as per my suggestion, firstly regularise him at general meeting and then appoint him as WTD.

Querist : Anonymous

Querist : Anonymous (Querist)

24 July 2013 Thanks Ajay

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