There is a line in pratice Manual like this............................... " However, if a notice received from required number of shareholders, it will be mandatory to appoint small shareholders director, otherwise it is discretionary.".....................................
here what is the meaing of the otherwise and discretionary here?.??????????????????/........................
As per Section 252 of the Comapnies Act read with Rule 4 of companies (Appointment of Small Shareholder's Director) Rules, 2001 :-
Appointment of SSD by co. suo moto is not mandatory.
But
Appointment of SSD in case when co receive a valid notice for such appointment then the co is bound to act on such notice.
Therefore if a notice received from required number of shareholders, it will be mandatory to appoint small shareholders director, otherwise it is discretionary.".....................................
Gupta Sachdeva & Co. Chartered Accountants
New Delhi
CA Final
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