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Additional Director

zankhana Trivedi (Company Secretary) (462 Points)

13 July 2010

Hi..

We are having Public Limtied Company (unlisted Company) and have 3 Driectors. One of our Director resiged w.e.f 30/06/2010. To fulfill the requirement of minumum Statutory Director under the Companies Act, we had appointed an additional director as on 30/06/2010. This appointment need to be regularized in the next AGM. As we had already printed our Annual reports, we don't have shown any transaction for regularizing that director as at that time we were not aware of resigantion of our Director.

Can anybody let me know how we can regularize the appoinment of an Additional Director???

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17 Replies

vivek (CS) (751 Points)
Replied 13 July 2010

Upto my understanding, There can be few ways:-

1. Serve another notice and call the AGM at Shorter Notice.

2. Immediately after AGM, call a BM and appoint him again addittional director for a year.

3. Before AGM convene a EGM at shrter notice and regularize his appointment.

Experts comment on other wayouts and could it be done?

Regards,

Ankur Garg (Company Secretary and Compliance Officer) (114773 Points)
Replied 13 July 2010

Option:1

Adjourned the AGM...re-adopt the AGM agenda and re-adopt the entire procedure u/s 171 read with section 53 i.e. forward the AGM notice again. Follow shorter notice provisions as per section-171(2)(i).

Option:2

File form-32 for cessation of additional director within 30 days of AGM and re-appoint him as an additional director by holding a BM either on the same day of AGM or subsequent to the date of AGM.

Wait for other suitable opinions. Thanks

1 Like

Yogesh Bhatt (Company Secretary) (475 Points)
Replied 13 July 2010

Dear Zankhana,

first . u r preparing director report for 2009 - 2010.

second . ur company 's one director is resign and u hv appointed Additional Director.

So in that case u need not cover this transaction in ur director report of 2009 - 2010.

and if it is matter of regularize it will regularize in AGM.

yes but if u hv prepare notice and already issued and u hv not mention any transaction in ur agenda than use way which is mention by VIVEK.

others members views are solicited.

1 Like

(Guest)

Originally posted by : Ankur Garg
	Option:1 Adjourned the AGM...re-adopt the AGM agenda and re-adopt the entire procedure u/s 171 read with section 53 i.e. forward the AGM notice again. Follow shorter notice provisions as per section-171(2)(i). Option:2 File form-32 for cessation of additional director within 30 days of AGM and re-appoint him as an additional director by holding a BM either on the same day of AGM or subsequent to the date of AGM. Wait for other suitable opinions. Thanks

Nitin Grover (CS) (1228 Points)
Replied 13 July 2010

Dear Mr. Joshi

when you are going to held your AGM ?

In my views get more printed page for these all details and attached with Annual Report.

and I am also agree with Vivek, Ankur and Yogesh

Regards

1 Like

zankhana Trivedi (Company Secretary) (462 Points)
Replied 14 July 2010

Dear Mr. Nitin,

Our AGM date is 12/08/2010.

Dear Mr. Ankur Garg

I think ur second option is better to follow but i have one query. Suppose we call BM on the same day of AGM and reappoint him as an additional director then before filing his cessation we need to file his reappoinment. So question comes whether MCA portal will accept his appoinment for the second time?? As before filing his cessation he would already be there in signatory details.

Thanks & Regards

vivek (CS) (751 Points)
Replied 14 July 2010

Is this the only matter of showing in the signatories detail or indeed it is the matter of compliance? Definetely their is non compliance and you should file Form-32 for cessation first then his appointment. This is as per law but wait for others views they will give clear idea that without cessation can the form for the same position be filed. Alternatively if you want to avoid non compliance you can appoint one more additional director for sometime.

CS Ankur Srivastava (Company Secretary & Compliance Officer) (17848 Points)
Replied 14 July 2010

First you have to file form 32 for cessation and then form 32 for appointment.

1 Like

zankhana Trivedi (Company Secretary) (462 Points)
Replied 14 July 2010

Both of u r absolutely right that before his appoinment we need to file his cessation but in our case if we will file his cessation first then there would remain only Two directors and being a Public Company there should be minimum 3 directors. So there would be default in complying with Statutory minimum requirement.

HARDIK (COMPANY SECRETARY NCFM (Corporate Governance )) (664 Points)
Replied 14 July 2010

For minimum requirement purpose of directorship you should appoint director in EGM before AGM.

Also you can print the detail of such appointment and bind such paper with annual report.

CS Ankur Srivastava (Company Secretary & Compliance Officer) (17848 Points)
Replied 14 July 2010

I think you have one more option,

Appoint a director under section 262 to fill the casual vacancy because of the resignation of director. Your problem would be solved. Then, do whatever you need as per the circumstances.

vivek (CS) (751 Points)
Replied 14 July 2010

Ankur Sir,

Perhaps the Section 262 will not apply over here because the additional Director was appointed by board itself this would not be the case if the addtional director was appointed earlier as Appointmnt in Casual Vacancy. Because section is as below:-

262. Filling of casual vacancies among directors.—(1) In the case of a public company or a private company which is a subsidiary of a public company, if the office of any director appointed by the company in general meeting is vacated before his term of office will expire in the normal course, the resulting casual vacancy may, in default of and subject to any regulations in the articles of the company, be filled by the Board of directors at a meeting of the Board.

(2) Any person so appointed shall hold office only up to the date up to which the director in whose place he is appointed would have held office if it had not been vacated as aforesaid.

I think there is a solution convene an EGM on 10/08 or 11/08 before AGM after giving 21 Clear days notice and regularize the appointment (You are having time).

Yogesh Bhatt (Company Secretary) (475 Points)
Replied 14 July 2010

dear zankhana.

if u file resignation and ur directorship requirement fall below minimum 3 director.

u need not take tension of non complinace. coz u hv six month time to appoint director so immediate after AGM u can reappoint him as additional director.

and in that case residual director can appoint another director to full fill ment of requirement.

and even if u dont take risk of non compliance of sec 45 u hv another option which already discussed by our member above.

but i dont think if u appoint other director before 6 month than thare is question of non compliance of sec 45.

others members views are solicited

Regards

CS Ankur Srivastava (Company Secretary & Compliance Officer) (17848 Points)
Replied 14 July 2010

Originally posted by : vivek
	Ankur Sir, Perhaps the Section 262 will not apply over here because the additional Director was appointed by board itself this would not be the case if the addtional director was appointed earlier as Appointmnt in Casual Vacancy. Because section is as below:- 262. Filling of casual vacancies among directors.—(1) In the case of a public company or a private company which is a subsidiary of a public company, if the office of any director appointed by the company in general meeting is vacated before his term of office will expire in the normal course, the resulting casual vacancy may, in default of and subject to any regulations in the articles of the company, be filled by the Board of directors at a meeting of the Board. (2) Any person so appointed shall hold office only up to the date up to which the director in whose place he is appointed would have held office if it had not been vacated as aforesaid. I think there is a solution convene an EGM on 10/08 or 11/08 before AGM after giving 21 Clear days notice and regularize the appointment (You are having time).