Qualification Shares of Directors

According to me it will not be a valid provision as the articles of a pvt. ltd. co. should specify the exact no. of shares. Moreover BOD cannot be given power to decide about the qualification shares.

Hye folks,

I did refer the Company Law book by “Dr. Chandratre & Mr. Ghosh” for Sec. 270. As we all may know that this section is N.A. to private company, provision for at least 1 qualification share as in case of public company, is not specified for private company. What is given in book is “The number of shares is not material, what is relevant is the nominal value of shares” which must be below / equal to Rs. 5,000/-

However, the true spirit of this provision is to give a free choice to private company to decide any number of shares, but must be decided and mentioned in AoA.

It is extreme case that BoD is authorized to decide no. of qualification shares and same is provided in AoA. Hence, in my opinion, just add exact no. of shares in AoA. Let it be any no. of shares but having nominal value below Rs. 5,000/-.

Shares include both equity as well as preference shares.

Any other views ????

This is not valid provision in article.

IF pvt ltd company is going to make provision for QS then it can either adopt Table A or can specify exact number/face value of shares to be taken as QS.... it can even be more than Rs.5000...

There should clear provision in AOA coz it is public document. & the candidate who is willing to be appointed as director must know his liabilities very clearly.. thats y exact number of QS is required...

@ Murlidharan : Sec 270 for qualification shares is not applicable to Private comapnies, so if articles of private company provided for holding qualification shares in any manner, it is to be complied with.... 

I am surprised after looking view of reputed member Adarsh. In any case, nominal value of qualification shares shall not exceed Rs. 5,000/-.

Second thing, logic behind qualification share is not to help director in knowing his liability (????) but it is to put some kind of liability on shoulders of director TOWARDS COMPANY since the position of director is position of responsibility & trust. If director can’t hold qualification share even how he will be held reliable in future?

Dude .. these are the provisions in relation to Sec. 270.

Views of other reputed members is highly solicited.

Dear Yogesh Shah The Limit Of Rs. 5000/-(Nominal Value ) Is Not Applicable to Private Company So Pvt. Company Can Make Thier Own Provision Regerding Qualification Share

SORRY FOLKS,

I did refer the Company Law book by “Dr. Chandratre & Mr. Ghosh” again and later I found that I was wrong.

Yes, views of reputed members Adarsh & Rahul are correct.