If a person is already MD in 2 companies can he be appointed as MD in 3rd company??
Pratibha Rathi (Trainee) (97 Points)
18 June 2011If a person is already MD in 2 companies can he be appointed as MD in 3rd company??
vipul patel
(Ahmedabad)
(320 Points)
Replied 18 June 2011
pls Tell me that Whether company is Private or Public
CA Suraj Prasad Shaw
(Chartered Accountant)
(504 Points)
Replied 18 June 2011
| Originally posted by : Pratibha Rathi | ||
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If a person is already MD in 2 companies can he be appointed as MD in 3rd company?? |
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Number of companies of which one person may be appointed managing director
No public company or private company which is a subsidiary of a public company can, appoint or employ any person as managing director, of he is either the managing director or the manager of any other company, except as provided below.
A public company or a private company which is the subsidiary of a public company may appoint or employ a person as its managing director, if he is the managing director or manager of one, and of not more than one, other company provided that such appointment or employment is made or approved by a unanimous resolution passed at a meeting of the Board and of which meeting, and of the resolution to be moved thereat, specific notice has been given to all the directors then in India.
In addition to the above provision, the Central Government may, by order, permit any person to be appointed as a managing direct of more than two companies if the Central Government is satisfied that it is necessary that the companies should, for their proper working, function as a single unit and have a common managing director.
Therefore if you want to appoint MD in a Pvt Company, it can be appointed otherwise the answer is no, a person already holding directorship in more than one public company can not appointed as MD in 3rd company.
ankit jain
(CS trainee)
(152 Points)
Replied 18 June 2011
Number of companies of which one person may be appointed managing director
No public company or private company which is a subsidiary of a public company can, appoint or employ any person as managing director, of he is either the managing director or the manager of any other company, except as provided below.
A public company or a private company which is the subsidiary of a public company may appoint or employ a person as its managing director, if he is the managing director or manager of one, and of not more than one, other company provided that such appointment or employment is made or approved by a unanimous resolution passed at a meeting of the Board and of which meeting, and of the resolution to be moved thereat, specific notice has been given to all the directors then in India.
In addition to the above provision, the Central Government may, by order, permit any person to be appointed as a managing direct of more than two companies if the Central Government is satisfied that it is necessary that the companies should, for their proper working, function as a single unit and have a common managing director.
Therefore if you want to appoint MD in a Pvt Company, it can be appointed otherwise the answer is no, a person already holding directorship in more than one public company can not appointed as MD in 3rd company.
Dear Pratibha,
After reading this paragraph we can easily find out that you can appoint a person as MD in 3 or more companies but for that purpose you have to take prior approval from the Central Govt. for such appointment.
Any other views are highly appreciated.
Pratibha Rathi
(Trainee)
(97 Points)
Replied 20 June 2011
thank u guys bt is there any court order or any case law restricting appt. of MD in more than 2 companies.
Rajnikant Vadigoppula
(CA, CS And CMA Final)
(919 Points)
Replied 20 June 2011
central government permit a MD in more than 2 companies only when it satisfies that there is a need of single MD in all three companies and work under same management
CAclubindia
