Mr. X and Mr. Y are the subscribers to the MoA of ABC Ltd., a public limited company incorporated on 01.01.11 under the Companies Act, 1956.Both of them had each subscribed to 50 shares of the company. The company has registered its own articles. However the same does not contain any provision as to first directors of the company and the articles also mention that regulations of Table A are not applicable. So, Mr. X and Mr. Y decide to hold the office as directors until the First Annual general meeting. Moreover, the articles did contain regulation for qualification shares which is read as follows:
“The qualification of a director shall be the holding of at least 101 shares of Rs.50 in
the company which has to be obtained within 56 days of appointment.”
Mr. X purchased the remaining shares on 27.02.2011 and Mr. Y applied for the remaining shares on 20.02.2011 but the shares got registered in his name on 05.03.2011
Advise in the light of provisions of the Companies Act, 1956 whether:
a) Are the articles valid in the light of provision of Section 270;
a) Would your answer change if the regulation of qualification shares is changed to:
“The qualification of a director shall be the holding of at least 100 shares of Rs.50 in
the company which has to be obtained within 2 months of appointment.”.
Also comment on the validity of Mr. X and Mr. Y to act as directors of ABC Ltd.
c) What would be your answer if the company has adopted Table A as its articles and also comment the validity of Mr. X and Mr. Y to act as directors in this case;
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