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Appointment of Managing Director in Private Company

27 April 2010

Dear Friends

Please send me the Board Resolution for the appointment of any director as Managing Director in the Private Limited Company ( not a subsidiary of public limited company)

Also the procedure of tha same

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9 Replies

Vasant Patel (Proprietor) (47 Points)
Replied 28 April 2010

Hi Can you send me Copy of Board Resolution for Appointment of Managing Director.

Ankur Garg (Company Secretary and Compliance Officer) (114773 Points)
Replied 29 April 2010

For the appointment of MD in a private company only board resolution is enough.

“RESOLVED THAT pursuant to the provisions of article ______ of Article of Association of the company and other applicable provisions of the Companies Act, 1956, Mr. Rahul Kumar, be and is hereby appointed as non-rotational Managing Director of the company without any remuneration for a period of 5 years w.e.f. April 29, 2010.

RESOLVED FURTHER THAT any Director of the company be and is hereby authorized to file the necessary returns with the Registrar of Companies.”

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Vasant Patel (Proprietor) (47 Points)
Replied 29 April 2010

Dear Sir

Thanks for quick Reply. In my Case one Private Limited Company wish to appoint MD/WD with Remuneration. I attach herewith draft of Board Resolution for appointment with Remuneration. Kindly look such draft resolution and suggest me your observation thereon.

Further if Private Limited Company appointed MD/WD and subsequently after six months it was converted into public limited Company (Closely held). Should such Converted Public Limited requires to comply with the provisions of section 198,390,301,311, Schedule XIII (in case of Inadequate profit or Loss), Constitution of remuneration committees etc. for payment of remuneration to such MD/WD during their tenure of office as MD/WD ?

I will highly appreciate if you can reply me.

Attached File : 43 md res pvt ltd company.doc downloaded: 2333 times

(Guest)

@ Vasant Patel.

Yes, If the company gets converted the Rules will surely apply.

Ankur Garg (Company Secretary and Compliance Officer) (114773 Points)
Replied 30 April 2010

After conversion all the remuneration provisions become applicable. But not from back date. In other words on conversion you may continue with present status of director and their remuneration.

However whenever you change the terms and conditions of appointment or remuneration you have to follow all the concerned sections of the companies act, 1956.

Attached File : 6 43 md res pvt ltd company.doc downloaded: 1891 times

Vasant Patel (Proprietor) (47 Points)
Replied 30 April 2010

Dear Sir

I appreciate your quick reply. If possible can you edit and send me corrected resolution. Because I can got two points marked by you in both resolution:

01. For which is red mark b/c we are doing apt of MD for 5 years hence I mention like "For a Period of Five Years"

02. Deletion of word "Whole Time Director" from 2nd Resolution

Further use of Word "non-rotational Managing Director" and non-rotational Whole Time Director in respective resolution.

Further after conversion into Public Limited Company, there will be retirement of Directors by rotation of in AGM. In terms of section 255. In this Case will Company will require to consider retirement by rotation of MD?WD at AGM ?