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Alternate Director

KOMAL (Executive) (37 Points)

11 October 2010

Pls let me know, if one alterate director can represent two directors of the same Company.

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4 Replies

praveen (Chartered Accountant) (6971 Points)
Replied 11 October 2010

there is no provision in the act prohibitng a person to represent two or more directors as alternate directors. However, if you can understand that this have a big effect in the meetings whenever there is voting. because two or more votes would be in favor or against the business proposed. This will seriously affect the companies working.

It is as a matter of good corporate practice to have one alternate director for one original director.

Because the main aim of appointing an alternate director is to allow free flow of business of the company. By appointing an alternate director for two or more directors the main purpose will not be served

Yogesh Shah (Managing Corporate Finance) (1051 Points)
Replied 13 October 2010

Hi Folks,

While teaching 'Interpretation of Statutes' to us in class, our faculty told us three basis rules in respect of any act -

1) When Law says you cannot - you cannot

2) When Law says you can - you can

3) When Law is silent - YOU CAN

On basis of above, I can say that 'one Alternate Director can be appointed for two or more original directors'. I agree with Praveen that a good practice would be one for one. But, a company CAN appoint one for two or more.

When one alternate director is appointed for two or more, presence for quorum shall be counted as two or more, votes will be counted as two or more. However, he is entitled for sitting fees for only one.

RAKESH KUMAR SINGH (Practicing CS) (39 Points)
Replied 13 October 2010

Dear all

No a person canot be appointed as a AD for two Directors in the same Company. Alternate Director is itself a Director and is not a nominee opf some person or Director and general principal of law is that one person can't be Director twice in same company.