Dear All,
This is with regards a Private Limited Company having 4 Directors each having 20-25% of the Shares. One of the Founder Director, Mr.X who is holding 25% of the Shares wants to transfer 50% of his Shares to his Son-In-Law Mr.Y and desires to bring him in as a New Director to the Company.
A board resolution, to allow Mr.X to transfer his Shares and for appointing Mr.Y as a new Permanent Director to the Company was passed. Later, the CA to the company conveyed that -
1. New Entrant has to first put an application to the Company for purchase of a nominal number of Shares (any number).
2. The Company than has to pass a Board resolution where in the new entrant shall be assigned the status of a "Permanent Director". The new Director than will have to apply for DIN.
3. The New Director than shall have to buy atleast 500 Shares within 3 months of becoming a director, The transferor (Mr. X) than can transfer his Shares to the transferee (Mr. Y)
4. The details of the newly appointed Director than shall be filed to ROC online.
My query - Is this process correct for appointment of a New Director who does not hold any Share to a Private Company?
Thanks in Advance to all experts for their opinion / guidance.
Regards,
Arkaraj Mukherjee
CAclubindia
