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Re-aapointment of MD & WTDs

Mitali Agarwal (Company Secretary) (638 Points)

24 May 2010

Hello Friends,

Please clarify the following:

1- If a whole time director (who is < 25 yrs. of age) is being appointed, then Special Resolution is passed for his app.?

2- If appointment of MD and WTDs is made at BM subject to approval of members in GM, then Form 23 is to be filed for MD after BM and another Form 23 is to be filed after GM?

REgards,

Mitali

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13 Replies

Nitin Grover (CS) (1228 Points)
Replied 24 May 2010

Dear Mitali 1- If a whole time director/M.D (who is < 25 yrs. of age or > 70 yrs) = Appointment has to be approved by Special Resolution in General Meeting. 2- Not sure abt this query but in my views we should file Form 23 both of the time Pls Correct if m not correct Regards

raspreet kaur (job) (55 Points)
Replied 24 May 2010

After the appointment has been approved at the General Meeting, only then Form 23 has to be filed with ROC.

Ankur Garg (Company Secretary and Compliance Officer) (114773 Points)
Replied 24 May 2010

1. Special resolution is necessary.

2. No need to file form-23 again after AGM.

Ankur Garg (Company Secretary and Compliance Officer) (114773 Points)
Replied 24 May 2010

Kindly go through my short note:

Re-appointment of Managing director-Unlisted public company

Re-appointment of Managing Director in a public company can be done by board meeting resolution subject to the approval of shareholders in a General Meeting.

For example if the term of your Managing Director expires on 31.03.2010 there is no need to worry at all. Simply pass a board resolution before 31.03.2010 subject to the approval of members in the general meeting and confirm the appointment in next General Meeting held immediately after his/her appointment by the board.

File all the necessary ROC forms (form 23 and form 25C) from the date of board resolution. Nothing is to be filed after General Meeting for confirmation as far as re-appointment of Managing Director is concerned.

Remember one thing retrospective re-appointment of Managing Director is not possible due to section 317 hence passing of Board Resolution subject to the approval of members before 31.03.2010 is mandatory.

As per DCA clarification the above practice is very much possible. Find below the extract of DCA clarification:

As per circular number 2/94 dated 10 February 1994— Managing Director may initially be appointed by a board resolution subject to the approval of members in the general meeting and such approval may be obtained in the first general

meeting of the company held immediately after his appointment by the board.

E-form filing with ROC:

1. Form-25C/25A, as the case may be, under section 269 within 90 days from the date of passing of board resolution.

2. Form-23 under section 192(4)(c) within 30 days of passing board resolution.

Form-32 is not required in case of re-appointment of Managing Director as there is no change composition in board of directors involved.

Best Regards

Rakesh Dhanuka (Company Secretary) (478 Points)
Replied 25 May 2010

Unable to find the said DCA clarification. Will it do if we file Form - 23 after AGM bcoz last time when WTD was appointed in our company said form was filed after AGM ? please clarify..

Regards

Mitali Agarwal (Company Secretary) (638 Points)
Replied 25 May 2010

Thanks a lot Ankur Sir for such a detailed clarification!

Ankur Garg (Company Secretary and Compliance Officer) (114773 Points)
Replied 25 May 2010

Dear Mitali,

Also note one thing--if you follow sch XIII for the appointment of Managerial personnel then you have to pass post special resolution irrespective of the age of appointee or irrespective of any other stipulation of part I of sch XIII.

Kindly check PART III of sch XIII.

Regards

Ankur Garg (Company Secretary and Compliance Officer) (114773 Points)
Replied 25 May 2010

Further i'd like to change/discuss my previous opinion regarding form 23.

Though purpose of form 23 is same but filing of form 23 in this case is governed by 2 different and speific sections viz section 192(4)(c) and 192(4)(a). Hence in my opinion separate regn of SR is equally imp. So i think 2 form 23 needs to be filed under different clauses of section 192(4). What is your opinion?

Jyoti Aggarwal (COMPANY SECRETARY) (336 Points)
Replied 25 May 2010

Thanks Ankur sir for your wonderful support every time.....

Nitin Grover (CS) (1228 Points)
Replied 25 May 2010

Dear Ankur

pls tell should we file form 23 after AGM also

and one more qst pls tell

if MD has appointed by company as per Schd. XIII than we can file Form 25 C and no need of approval of C.G. Form 32 is also compulsory or not means Form 25 C is sufficient

In my views Form 32 is required also with in 30 days and Form 25 C in 90 days from apopintment day

Pls correct me All

Regards

Rasesh (CS CWA MBA (Fin) B.Com LL.B (Spl)) (6501 Points)
Replied 26 May 2010

Agree with Mr. Ankur on one point that Form 23 should be ideally filed on both the ocassions.

If the appointment is made under Schedule XIII, then it need not be necessarily by special resolution.

Gargi Ranade (CS) (619 Points)
Replied 27 May 2010

Correct me if I am Wrong

ROC updates the status of Director i.e. WTD/ NED/ AD through form 32 itself after removal of DIN 3 form all the updation of database is done through form 32 only so As per my knowledge any change in designation of MD or director should be filed through form 32.So I agree with Nitin Sir.

Secondly, Regularisation of appointment of director is done through ordinary resolution ,whereas form 23 is required for special resolution or for changes in terms of appointment of MD so in my view if it is regularaisation of appointment of MD then form 23 is required whereas in case of regularaisation of appointment of director it is not required .

Gargi Ranade (CS) (619 Points)
Replied 27 May 2010

Correct me if I am Wrong

ROC updates the status of Director i.e. WTD/ NED/ AD through form 32 itself after removal o DIN 3 form all the updation of database is done through form 32 only so As per my knowledge any change in designation of MD or director should be filed through form 32.So I agree with Nitin Sir.