Navneet Garg (Chartered Accountant) (70 Points)
04 January 2011
Shridhi Jain
(Company Secretary)
(1678 Points)
Replied 04 January 2011
File form 32 for regularising the AD as director. His name should be mentioned in AR as director but if its not been done then its a mistake. Dont try to make your mistake knwn to public or ROC. Wait and watch. If the error get caught then take necessary action otherwise ignore it.
Update ur minute book, file form 32 with late fee.
Dear experts, pls correct me if i m wrong.
Jaideep
(Service)
(1368 Points)
Replied 04 January 2011
Hi,
Term of additional director will be valid only upto conclusion of AGM. If the details of additional director was not incorporated in the notice of AGM, its a fault from company.
However as a procedural matter, you can first file form 32 for his resignation and again appoint him as AD.
If notice was sent previous to his appointment, file form 32 for appointment only, assuming that matter was put before AGM and members has appointed AD, accordingly prepare minutes along with documents for section 257.
Other members views are solicited.
Regards
Muralidharan
(Self Employed)
(1034 Points)
Replied 04 January 2011
Dear Mr.Navneet Garg
An Additional Director holds office only upto the date of AGM (not until the conclusion of the AGM - only statutory auditor holds office until the conclusion of AGM). If your accounts were drawn upto 31st March 2010 then your last date for AGM would be 30th September 2010. You have stated that his appointment has not been regularised by including a resolution in the AGM Notice. In that case the additional director appointed by the company would have automatically vacated the office. You have informed that the Annual Return has also been filed with ROC. (As your query is not clear, I have to presume that the details of the Additional Director has not been mentioned or included in the Annual Return by the company).
The procedures to be followed by the company would be as follows:
(1) File a Form 32 with ROC (with late payment) for resignation or vacation of the said additional director, which would be with effect from 30th September 2010.
(2) In the Annual Return you should have mentioned about the appointment of Additional Director wef 07.09.2010 and his vacation from the office wef 30.09.2010. Since the form is already filed and taken on record nothing can be done for now. Pray the God you do not get any notice from ROC. (Here I presume that the details of the Additional Director has not been mentioned in the Annual Return)
(3) If you wish that the person should continue in the board then convene a board meeting after the conclusion of the AGM (If AGM is held at 11.00 am on 30.09.2010 then have the board meeting in the afternoon at 02.00 p.m. or any other date you wish) and pass necessary resolutions for appointing him as Additional Director once again. For this also you need to file a Form 32 with ROC.
(4) As a matter of abundant caution please do not combine both the resignation and fresh appointment in the same Form 32. File separate forms with ROC. My feeling is attempting to file one Form 32 for the same person may invite the attention of the approving officer at ROC and there is a chance he may also check the Annual Return filed by the company. This may lead to issuing of Notice to the company. Hence avoid it.
(5) Inspite of not regularising the appointment at the AGM by including the resolution in the Notice, if the company has included the details of the Additional Director in the Annual Return, then this could pose a serious problem for the company. In such a case it is advisable to approach officer concerned at ROC and inform him the facts and to find a solution, how to file a revised Annual Return. If permitted to file revised Annual Return, in this return the appointment and vacation of office by the Additional Director can be mentioned.
with regards
Muralidharan
Charu
(nil)
(122 Points)
Replied 04 January 2011
Hi,
I agree with the views of Mr. Jaideep.
The term of Additional Director ends with the conclusion of the AGM. Hence in this case, the Additional Director shall automatically vacates his office with the conclusion of the AGM.
If you wants to re-appoint him, then you have to again appoint him as Additional Director in terms of section 260 of The Companies Act, 1956, and have to complete required formalities, as mentioned by the learned members.
CS Ankur Srivastava
(Company Secretary & Compliance Officer)
(17853 Points)
Replied 04 January 2011
The Additional Director shall hold office upto the date of next Annual General Meeting. Therefore, in my opinion, in your case file form 32 for cessation of Additional Director. He is no longer in the Board because his office has ended as on the date of AGM.
Jayashree S Iyer
(Company Secretary)
(3224 Points)
Replied 04 January 2011
I agree with the experts.
However it it's a small closely held company, manage to show one EGM before the AGM date and show his regularisation in that EGM and file Form 32 for change in designation.
nidhigoel89
(Company Secretary )
(596 Points)
Replied 04 January 2011
Hello Everyone!
jst one thing pl clarify
That for a general meeting we need to issue a notice atleast 25 days before the meeting and if we take 25 days from 7th September then it will go beyond 30th September.......So how would we include the business of regulerization of additional director in the notice of AGM or EGM..................
Regards
Nidhi
CS Ankur Srivastava
(Company Secretary & Compliance Officer)
(17853 Points)
Replied 04 January 2011
May be with shorter notice.....
Navneet Garg
(Chartered Accountant)
(70 Points)
Replied 04 January 2011
Charu
(nil)
(122 Points)
Replied 04 January 2011
| Originally posted by : Jayashree S Iyer | ||
 |
I agree with the experts. However it it's a small closely held company, manage to show one EGM before the AGM date and show his regularisation in that EGM and file Form 32 for change in designation. |
 |
As per section 260 of the act, " such additional Director shall hold office only upto the date of the next annual general meeting of the company"
Hence ,in my opinion, his regularization at EGM will not serve the purpose. His office can be regularized only at AGM.
Views of learned members are soliciated.
Jayashree S Iyer
(Company Secretary)
(3224 Points)
Replied 05 January 2011
Hi Charu,
Directors are to be appointed at General Meetings as per Section 255 of the Act.
As per section 260, Additional Director shall hold office only upto the date of next AGM. This is the maximum permissible time beyond which the office of additional director gets vacated. However before the next AGM he can be appointed as a regular Director in the EGM.
CS Ankur Srivastava
(Company Secretary & Compliance Officer)
(17853 Points)
Replied 05 January 2011
| Originally posted by : Jayashree S Iyer | ||
|
|
Hi Charu, Directors are to be appointed at General Meetings as per Section 255 of the Act. As per section 260, Additional Director shall hold office only upto the date of next AGM. This is the maximum permissible time beyond which the office of additional director gets vacated. However before the next AGM he can be appointed as a regular Director in the EGM. |
|
Agree.......
Sudhir Garg
(Service)
(236 Points)
Replied 07 January 2011
Dear All
In context of above, please let me know in case of urgency of appointment of additional director, Board appoints someone as Additional Director on 27th September 2010 and holding AGM on 30th September 2010 notice of which has already been circulated before 25 days. Then, please advise whether said Additional director office also be vacated??
I think it will not be vacated. Notice for AGM must mention the business to be transacted in forthcoming AGM. Except four specified matters, every other matter in AGM needed to have Explanatory Note alongwith. Get it approved in next year AGM or if possible convene EGM and regularise him.
With respect to Annual General Meeting, it was mistake not to mention.
Please
Regards/Sudhir
CAclubindia
