Dear Professional frienends,
whether Board can appoint the M.D/ Director with retrospecttive effect by ratifying the appointment? it means the M.D/Director is appointed by the Board but with retrospective effect.
Please guide me in this regard.
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Appointment of Managing Director
Replies (6)
Dear vijay,
I think you can do but plz make it clear that you are not contravening any section.
if you are more specific in this regard then i can help you.
thank you sir.
in a case the term is completed on first week of jan 2010 and B.m took place on last week of Jan 2010. In B.m M.D was appointed with Retrospective effect by ratification.we are in compliance of Sec-269,198,309,310&sch-XIII of the act.
you have said that with out contravening any provision , which provision will hit this?
Please guide me.
Thanks.
Hello,
No your Board cannot appoint the M.D/ Director with retrospective effect by ratifying the appointment. Reason behind this interpretation is proviso to sub section (3) of section 317.
By virtue of proviso to sub section (3) of section 317 law allows you to re-appoint managerial personnel well in advance before the expiry of his/her term. If you failed to use this relaxation then law can’t help it.
Best Regards
Dear Ankur,
I am not agreeing with the views of yours because you take this proviso as condition and i am taking as exception.
Board can't ratify only those contracts which are ultra vires means not according to Company law and Memorandum and Articles of Association.
Dear Vijay,
plz check your MOA and according to me Company Law is not prohibited
Other views are solicited.
Dear Vijay,
Re-appointment of MD/ WTD must be made well in advance i.e. before the eqpiry of his tenure.
However, as per your query the tenure of the MD has been ended in the first week of January, 2010 but the BM was held only at the last week of January, 2010. So if the tenure of the MD is over how he worked under the capacity of MD, Form 32 (for change in directorship) must be filed within 30 days and when the reappointment is made new form 32 (for reappointment of MD) is required to be filed within 30 days.
So the reappointment must be made well in advance.
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