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Appointment of ceo

2195 views 1 replies

Jay

Member

48 Points Joined July 2013

Hello

I have a query related to appoint of CEO. A new software company has been formed with 2 directors. Now the directors wish to appoint a CEO, who will be responsible for overall execution of company and will have the authority to sign and execute orders and instructions. Apart from recruiting, do directors need to pass a board resolution for appointing CEO of the company? Is there any requirements as per corporate laws apart from selecting and hiring a CEO? How will a company, as an entity will know that XYZ is the appointed CEO of the company

Request your advice on this

Thanks

Regards

Jay

Replies (1)

P C Agrawal

Registered independent director Past Ch

8229 Points Joined March 2007

Companies Act 1956 does not mandate a private company to appoint CEO. It seems he will not be a member of the Board. Being senior position next to Board level, it would be advisable to pass Board resolution or give power of attorney to any one director to make appointments etc. so that there is no dispute in future. There is no way an outsider can know that he is CEO, other than his appointment letter or visiting card etc.

Section 203 of Companies Act 2013 talks about appointment of CEO in certain class of companies. Howevet, this section has not yet been notified and Rules are yet to be finalised.