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Additional Director

Sundeep Bodhankar (HR Strategic Partner) (31 Points)

12 September 2007

What is the term of Additional Director?

In a particular case pertaining to a private limited company, an Additional Director was appointed till the conclusion of the next AGM (in 2006). He remained with the company and his continuance was not filed with RoC or intimated to anyone. He signed only the banking cheques on behalf of the company till date. He wants to resign now.

Should be resign as Additional Director or Manager? Should he go on DIN/DSC and role check? What is his capacity?

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10 Replies

Ramasubbu K (Sr.GM - Finance & Company Secreta) (685 Points)
Replied 14 September 2007

Additional Directors are co-opted directors as per Section 260 of the Companies Act subject to the provision in the Articles of Association of the Company. The additional Director unless appointed in the next AGM held after his appt ad Addl. Director, he shall vacate the office as director automatically. So he need not resign separately. Once vacated, Form 32 shall be filed wuth ROC. If you want further clarification, Please do write.

M Verghese (CA Student) (52 Points)
Replied 19 September 2007

So are the actions performed by him after the AGM (2006) valid?

Ramasubbu K (Sr.GM - Finance & Company Secreta) (685 Points)
Replied 19 September 2007

How come a director can sign the cheques after his vacation? All transaction are invalid.

(Guest)

An additional director holds office only upto the date of next AGM which falls after his/her appointment, so for regularisation of such director provisions contained in Section 257 needs to be followed(According to circular of MCA).

(Guest)

As far as office of additional director is concerned, it automatically ends on the date of AGM held after his appointment. As far as signing of cheques is concerned, please note that law does not requrie that the cheques for a company be signed only by the directors. It means, the Board may authorise any person to sign the cheques on behalf of the company. Therefore, cheques signed by an individual even after cesation of office of director are valid. Since office as additional director has already ended, there is no need to resin him.

Vaibhav Ashtaputre (Service) (34 Points)
Replied 25 November 2009

I want to know the powers of additional director?

Ankur Garg (Company Secretary and Compliance Officer) (114773 Points)
Replied 25 November 2009

Hi,

Additional director have all the powers of a normal directors. He can participate in the board meetings, sign the documents, counted for the purpose of quorum etc. All the provisions applicable to other directors are also applicable to an additional directror.

Also refer section 260 of the companies act, 1956.

Regards

1 Like

Vaibhav Ashtaputre (Service) (34 Points)
Replied 03 December 2009

Thanks Ankur but still I want to know, does it have any procedure to restrict the power of the additional director? i.e. can we restrict the power of additional director?