Dear All,
Kindly share that in a case where a person was appointed as MD of private Company by its BOD without any limit on his tenure 8 years back but only his remuneration is revised every year. Now the section 196 of CA 2103 says that an MD cant be appointed or reappointed for more than 5 years at a time. My query is that if the private comapny required to pass Board resolution for his appointment for 5 years and also is shareholder approval required for same as per 196(4) of the Act.
Strictly speaking, appointment/reappointment under CA 2013 should not be necessary if there is no change in existing terms as provided in Sec.465. However, Sec.465 is not yet notified and in the case of Sec.180 also MCA is asking companies to pass fresh resolution even if earlier resolution u/s 293 is valid. Hence to be on safer side it would be advisable to follow Sec.196 in entirety and file return again under CA 2013. No exemption has been provided to private companies.
Thanks Sir,
But in my case only remuneration is revised every year and not his term. His term is totaly dependent upon discretion of the Board. So should I fix his term also in the next board meeting when his remuneration is revised, will that be fine. Also can he vote on resolution for his remuneration and re-appointment for term of 5 years as per section 184 of CA 2013.
M N Rao & Associates LLP
Vijayawada
CA Inter
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S.B.G. & CO. CHARTERED ACCOUNTANTS
New Delhi
CA Inter
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CCI
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