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Filing of form mr-2 for approval of cg for appointment of wtd

Sapna Goyal (Trainee) (25 Points)

11 January 2017

We are required to avail Central Government approval for appointment of Whole Time Director. Application in Form MR-2 is to be filed for approval of CG. Now we want to know whether Form MR-1 is also required to be filed for the appointment of WTD subject to CG approval.

Companies Act, 2013 and rules does not clarify this specifically. However Instruction Kit of Form MR-1 specify that Form MR-1 is filed in case the appointment of an key managerial personnel is made within the specified parameters (in accordance of schedule V of the Companies Act, 2013).

Kindly provide solution to the query that whether Form MR-1 is also required to be filed with ROC in case of filing of Form MR-2 with CG on urgent basis.

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6 Replies

Nikhil Sharma (Government Service) (539 Points)
Replied 11 January 2017

MR-2 is just for obtaining approval. MR-1 has to be filed

Sapna Goyal (Trainee) (25 Points)
Replied 11 January 2017

But purpose of filing of Form MR-1 is to file return in case of appointment of key managerial personnel in accordance with Schedule V of the Companies Act, 2013 as specified in Instruction Kit of the Form and in our case the appointment is not in accordance with Schedule V. Also nothing has been specified in Form MR-1 regarding approval of CG and/or non-compliance of Schedule V. As per my understanding, Form MR-1 is not required to be filed for appointment of KMP subject to CG approval if Form MR-2 is being filed.

Kindly reply at the earliest whether Form MR-1 is also required to be filed with ROC in addition to filing of Form MR-2 with CG.

Legistify (33 Points)
Replied 11 January 2017

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Jatin Bajaj (CS) (2928 Points)
Replied 12 January 2017

THE WHOLE TIME DIRECTOR OR THE MANAGING DIRECTOR OF THE COMPANY IS REQUIRED TO BE APPOINTED AS PER THE PROVSIONS OF SECTION 196 , 197 , AND SCHEDULE V of the Companies Act 2013. if Schedule V is not followed then whole time director is appointed subject to approval of central govt. if the company is able to comply with the provision of schedule v , then company needs to file MR 1 within 60 days of appointment. No need to file Form MR 2. But if Company is not able to comply with Schedule V , then Company has to file Form MR 2 with CG within 90 days of appointment and no need to comply to file MR 1.

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Sapna Goyal (Trainee) (25 Points)
Replied 13 January 2017

Companies Act, 1956 specify that the return in Form 25A (new e-Form MR-1) is to be filed in case of appointment made in accordance with the conditions specified in Parts I and II of Schedule XIII and application in Form 25C (new e-Form MR-2) is to be filed in case of appointment subject to approval of CG.

However Section 196* of the Companies Act 2013 specify that return in Form MR-1 is required to be filed in case appointment is made subject to approval of shareholders and approval of CG in case such appointment is at variance to the conditions specified in that Schedule. And Form MR-2 is required to be filed for making application to CG for its approval.

As per provision of Companies Act, 1956, Form MR-1 was not required to be filed if Form MR-2 being filed whereas new provisions of Companies Act,2013 does not specify clearly whether to file Form MR-1 if Form MR-2 being filed.

* Section 196(4) of the Companies Act, 2013 - Subject to the provisions of section 197 and Schedule V, a managing director, whole-time director or manager shall be appointed and the terms and conditions of such appointment and remuneration payable be approved by the Board of Directors at a meeting which shall be subject to approval by a resolution at the next general meeting of the company and by the Central Government in case such appointment is at variance to the conditions specified in that Schedule. Provided further that a return in the prescribed form shall be filed within sixty days of such appointment with the Registrar.

Kindly Suggest.