Kindly advise on the following
MD of a public company with paidup capital less than 5 cr has not been reappointed after the expiry of his term in Sept 2017. What is the way out other than paying the penalty? How to regularise his appointment?
Annu Tiwari (Company Secretary) (46 Points)
08 January 2019Kindly advise on the following
MD of a public company with paidup capital less than 5 cr has not been reappointed after the expiry of his term in Sept 2017. What is the way out other than paying the penalty? How to regularise his appointment?
Yash Lahoti
(101 Points)
Replied 08 January 2019
Section 203 (4) states that if the office of any whole-time key managerial personnel (Managing Director) is vacated, the resulting vacancy shall be filled-up by the Board at a meeting of the Board within a period of six months from the date of such vacancy.
Further, no director can be appointed from the back date or retrospective effect. Therefore, appointment of MD also can’t be done from back date. If his appointment will be made after expiry of term that should be considered as fresh appointment, not in continuation of earlier appointment.
Therefore, now it can only be a fresh appointment which may require payment of penalty.
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