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

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Supremo Vinod Shah

Adviser

45 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)

Replies (1)

Vibha Trivedi

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

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