Employing spouse in private ltd company without taking consent of other directors

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52 Points Posted on 29 October 2018

Dear Experts,

One of Director from our Private Limited Company want to appoint his wife as an employee in the Company without taking consent of the other two directors (shareholders). Is it legally accepted? if not, under which rule?

Kindly guide me.

(Vinod Shah)

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On 29 October 2018 at 16:06 Report
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437 Points Posted on 30 October 2018
It is a Related Party Transaction under section 188 of the Companies Act, 2013.
Hence a Board Resolution is required to be passed.

If appointment is made without authority of board resolution, it has to be ratified by the Board within 3 months.

If these provisions are not complied the director will have to face penal consequenses.
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On 30 October 2018 at 07:37

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