Directors appointment

Hi

Since section 198 and 309 are not applicable to pvt companies. there is no bar on showing executive or non executive.

Dear Gargi,

You have mentioned in your problem that if he is actively involved in day to day management then he must be appointed as executive director. Well I don’t agree with you on that point unless you appoint him as WTD.

Normally WTD and a director drawing salary are considered as executive director. If by writing “actively involved” here you mean he will be in the whole time employment then you have to consider him as a WTD and follow sec. 269 (CG or Schedule XIII).

In simple word if in Form-32 you are appointing him as Director/Additional Director then in that case simply mention Non Executive Director.

If you mention him as a WTD then you have to appoint him as Executive Director.

Views of other learned members are also solicited.

Hi Gargi,

Kindly appreciate—A director who should be appointed as NED as per law interpretation but appointed as ED in form-32 creates no default at all.

So just do not worry and please go ahead.

Further you are right as section-269 not applicable to a Pvt. Co. and as in your case also it is not applicable.

Note for your future reference----appointment of a director as NED or ED through form-32 does not make any difference as far as private company is concerned.

Only in case of a listed company appointment of a director as NED or ED through form-32 plays a very crucial role.

So you can appoint him as ED even if he belong to NED director category.