Discussion w.r.t. section 160 (section 257 in ca 1956)

Co Act 2013 865 views 5 replies

Ankur Garg

Company Secretary and Compliance Officer

114788 Points Joined January 2009

Discussion w.r.t. Section 160 (section 257 in erstwhile CA 1956)

Technically a Director who comes for regularization is outside the preview of Section 160 (section 257 in CA 1956) for 2 reasons as given below:

He is a retiring Director; (and Section 160 is primarily applicable to the candidature of a proposed director who is not a retiring director.)

His candidature is usually proposed by the Board of Directors. (and not by the candidate himself or by any member which is a pre-condition for section 160 (section 257 in CA 1956)).

However, long time back, the Department took a view that still section 257 would be applicable to an additional Director who comes for regularization and professionals were compelled to take care of the provisions of section 257 at the time of regularization of directors.

Can we conclude that the same opinion of department will continue with respect to section 160 of CA 2013 even if pre-conditions of section 160 can’t be fulfilled?

Further as per my understanding section 160 is not applicable to the appointment of independent directors as the candidature of independent director is required to be proposed by the Board of Directors read with section 178 and schedule IV.

Let’s discuss.

Thanks

CS Ankur Garg

Replies (5)

Desai

329 Points Joined June 2014

Dear Sir,

i have follwoing queries :=

1) Section 160 of the Companies Act-2013 is also applicable to Private companies ?

2) if yes , that means the additional director appointed in private companies will also need proposal from memebr or other person with fees of Rs.1 lakh ?? and no higher amount is prescribed in the rule ? ?

3) Section -152 retiring director is applicable only to public companies ??--now Independent director , additional director , exe director and m.d. are outside the purview of total no.of directors .so to determine the 1/3 wch no.to be taken.( as the words of section 152 -"for the time being as are liable to retire by rotation, or if their number is neither three nor a multiple of three, then, the number nearest to one-third, shall retire from office-needs more clarifications)

kindly help in understanding the Section 160 and section 152(retirement of dire)

RoHaN k

CA & CS

308 Points Joined May 2009

Ankur sir can u refere any case law / circular where department took a stand to apply provisions of erstwhile sec. 257 in case of regularization of additional director,?

CS Omprakash Soni

ASSTT. MANAGER

46 Points Joined December 2010

Sir, in our company there are only 3 director. Out of which, 2 are independent director and 1 is promoter category. In this case, since independent directors are not liable to retire by rotation (Section 149), therefore that 1 director will be liable to retire by rotation every year at AGM.

It is correct?? pls carify..

RoHaN k

CA & CS

308 Points Joined May 2009

Soni sir , in my openion your stand has to be correct.

because there is no other option ,

otherwise , you need to appoint an additional director to cure such hurdle.

RoHaN k

CA & CS

308 Points Joined May 2009

Ankur sir ,

There is a one doubt regarding the discussion initiated by you.

section 160 mandates deposit of 1 lakh Rs. and same should be refunded after regularization , if according to your discussion topic , same provisions of 160 to be followed even at the time of regularization of additonal director ,

1] At such time what about the previous 1 lakh rs deposit ? when it will get refunded ?

2] whether again such additional director need to deposit such money at time of regularization? or just a notice of candidature?

Please clarify