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Appointment of managing director

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Amit Kumar Verma

CA Final CS Professional

325 Points Posted on 06 December 2012

Hello Members,

Please give your opinion in the following matter:

Section 316(2) states that a unanimous board resolution is required in case a public limited company wants to appoint a person as managing director who is already a managing director in any other company.

Now I want to know that when the unanimous board resolution is required? Can it be passed after the appointment of the said person as managing director or prior approval of board is required?

Thanks.

Replies (6)

Yogesh Bhandari

CA FINAL Student

458 Points Posted on 06 December 2012

Prior approval of board is required.

CA Lalit Kandoi

Chartered accountant

409 Points Posted on 06 December 2012

Board resolution should be passed before the appointment of MD

Amit Kumar Verma

CA Final CS Professional

325 Points Posted on 06 December 2012

Thanks for your replies frnds.

But nowhere in the section it has been mentioned that prior approval is required.

Please tell me the source of interpretration or any other source.

Thanks.

Law Aspire

563 Points Posted on 06 December 2012

U need Board approval to appoint such a person as MD . And only after that u can appoint him. A Board Resolution is passed to Showing that Board is agreeing(with relevant Majority) to appoint him,

Ankur Garg

Company Secretary and Compliance Officer

75761 Points Posted on 06 December 2012

Main section in your case is section 269 and section 316 is just a secondary section. Considering the overall intention of law regarding appointment of MD, I can say that unanimous board resolution under section 316(2) is not a prior one.