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managing director

18 October 2017

may a managing director may be appointed if he resigned and hw, however wants to continue as a director in a company...?

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2 Replies

Satya Lahiri Dandlamudi (CA Final student) (526 Points)
Replied 20 October 2017

Hi!

We know that the office of MD is coterminous with the office of director in case he is removed u/s 169. However, the Companies Act doesn't expressly provide in section 168 or else where, anything with regard to resignation as MD yet continuing as an ordinary director.

Most of the companies through Articles of association empower the board to remove a person from office of MD yet allowing to continue as director. So, in my view this can be done with resignation too. I'm sorry I could not get a relevant case study.

Bhargav parekh (article) (98 Points)
Replied 29 October 2017

The position of MD is nothing but a delegation of execution power to a single director. so when a MD does not want to be in charge of executive power, he can resign and give back powers to board and can surely be continue as a director of the company.