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Apointment of Managing Director

30 July 2010

Please answer to query

XYZ is the public limited company proposes to appoint Managing Director ( who is not a additional director or director) of the company. Can i move this way

01/06/2010 (Board Meeting) - Appointment of "X" as Additional Director

22/06/2010 (Board Meeting) - Appointment of "X" as Additional Mangaging Director

30/09/2010 (AGM) - Confirm "X"as MD

Please clarify whether is it the right way to appoint MD

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5 Replies

Vaibhav Shukla (Company Secretary) (142 Points)
Replied 30 July 2010

Dear Deepanshu,

Even an Additional Director can be appointed as MD but since an Additional director can hold office only upto tha date of AGM it is neccssary to regularise him first and if he fails to get elected as a Director than he will also cease to hold the office of a MD....So the right way to go is to regularise the additional director first and than go for the Consent of the members for appointment as MD..

Regards

ACS Vaibhav

CS Ankur Srivastava (Company Secretary & Compliance Officer) (17848 Points)
Replied 31 July 2010

First appoint any one as Director / WTD in Board Meeting or General meeting directly and then appoint him as MD no problem.

Requirements:-

Remuneration to be approved by Remuneration committee and part I and II of schedule XIII is to be complied with.

If you appoint anyone as Additional director then you should regularise him first them appoint him as MD.

Jagruti (CS) (Service) (1953 Points)
Replied 31 July 2010

There is 2 option for appointment of MD:

1. In a Board Meeting first appoint him as Additional Director as well as MD and later in general meeting resularise him.

2. Appoint him directly in EGM as Director & MD so question of regulairsing do not arise.

No need to wait till he is regularised and than appoint him as MD. Also appointment of remmuneration committee is required only when profits of COmpany are inadequate or no profit.