Will a Managing Director receive compensation for loss office if he refused to hold the office after amalgamation in the resulting new body?
shiksha arya (CA Final Student) (37 Points)
05 September 2011Will a Managing Director receive compensation for loss office if he refused to hold the office after amalgamation in the resulting new body?
G.L.Subhramanian
(PCS)
(206 Points)
Replied 06 September 2011
Hi shiksha,
The compensation for loss of office shall be provided by the company only if the concerned Managing Director is not appointed in the amalgamated company. [Section 318]
Regards,
Subbu
shiksha arya
(CA Final Student)
(37 Points)
Replied 06 September 2011
thanx for the reply but if he has offered same designation in the new body and he refused to accept it then will he get the compensation or not ?
because in a case it was held that "these contracts are of personal nature and empolyees are not furniture , hence contract cannot be transfer to new body with out their consent " Managing Director are employees of the company.
G.L.Subhramanian
(PCS)
(206 Points)
Replied 06 September 2011
Hi Shiksha,
To accept the offer or not shall be at the disposal of the concerned person. Therefore, if he chooses not to be the Managing Director after amalgamation, he is entitled to compensation for loss of office.
Regards,
Subbu
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