Additional director

Co Act 2013 168 views 3 replies

APURBA CHATTERJEE

QUALIFIED CHARTERED ACCOUNTANT

608 Points Joined November 2016

One Additional Director has been appointment by a private company as on 01st June, 2017. But due to some reasons AGM has not been held so far for the FY 2016-17. Currently, the number of directors of the company is two alongwith additional director. As per provision the office of additional diector should get vacated as on the last day on which AGM should have been held.

Now my question:

1. Whether company violates the requirement of maintaining minimum two directors as additional director office get vacated as on the last day on which AGM should have been held.

Replies (3)

P C Agrawal

Registered independent director Past Ch

8229 Points Joined March 2007

You should immediately appoint another director to complete requirement of minimum two directors. Failing this, you may be liable under newly inserted Section 3A which has been notified from 9.2.2018:

Members severally liable in certain cases.

3A. If at any time the number of members of a company is reduced, in the case of a public company, below seven, in the case of a private company, below two, and the company carries on business for more than six months while the number of members is so reduced, every person who is a member of the company during the time that it so carries on business after those six months and is cognisant of the fact that it is carrying on business with less than seven members or two members, as the case may be, shall be severally liable for the payment of the whole debts of the company contracted during that time, and may be severally sued therefor.

Santhosh Ganesh

AGM - Secretarial

136 Points Joined July 2011

Yes there is a voilation w.r.t the compliance of minimum number of directors

you can appoint a new person in the board and ensure the statutory requirement is complied.

Shrijay Sheth

Co-Founder

2692 Points Joined September 2017

Yes, as the additional director has to vacate the post, there in only one director left.

Therefore, it violates the provisions of minimum requirement of directors in the company. You are required to immediately process for the appointment of new director.

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