Sample resoltion for regularisation of Additional Director

thanx sir. really a very useful post for me.

Sir,

Kindly let me know whether Additional Director is retiring or vacating the office at the ensuing AGM.

Because if he is retiring, appointing him as regular director will be ordinary business.

And one more question is that Additional Director of a Private Company is liable to retire at AGM. (Just for Clarification)

Originally posted by : BHARATH SRIVATSAN
	Sir, Kindly let me know whether Additional Director is retiring or vacating the office at the ensuing AGM. Because if he is retiring, appointing him as regular director will be ordinary business. And one more question is that Additional Director of a Private Company is liable to retire at AGM. (Just for Clarification)

Dear Bharath,

Additional Director holds office only upto the date of next Annual General Meeting. Therefore, it is necessary to regularise him on or before AGM. If he is not regularised, he would not remain director of the company from the date of AGM.

Secondly, under companies act there are only 4 Ordinary Business, except them all the business to be transacted in any general meeting are special business. Although, it requires Ordinary Resolution.

Under section 173(1)

In case of annual general meeting, all business to be transacted at the meeting shall be deemed to be special businiesses, except relating to:

(i) the consideration of the accounts, balance sheet and the reports to the board of directors nd auditors;

(ii) the declaration of a dividend;

(iii) the appointment of directors in the place of those retiring, and

(iv) the appointment of, and the fixing of the remuneration of the auditors.

Further, to clear your doubt....

The regularisation of Additional Director does not comes above clause (iii) it is for retirement of directors by rotation.

Additional Director holds the office only upto the date of next AGM and thereafter he vacates the Office.  So there is no question of reappointment or reelection of such Additional Director as Director in the AGM. 

He is however entitled to stand for  Directorship by following the procedure mentioned in Section 257 i.e. serving a notice to the company of his intention to stand for directorship 14 days before the meeting and depositing a sum of Rs.500/- with the company.  In the General Meeting (special business), only when the members pass a resolution  appointing him as a Director,  he becomes a  Director of the Company.

Agree with Ms. Jaishree's view and wish to add the following:

Pursuant to provisions of Section 257(2), the provisions of Section 257(1) is not applicable to a private company, unless it is a subsidiary of a public company. Accordingly, a private company need not has to follow the procedure laid down under section 257(1).

Best Regards

CS Ashwini Kumar

Additional Director holds the office only upto the date of next AGM in which he is appointed and thereafter he vacates.

It will be a special business to appoint or regularize him.

Regards

Hi All,

Thanks for ur replies..

Reappointment of Additional Director at AGM::

The Department in its Letter No. 8/16(1)/61-PR, dated 09-05-1961 clarified that:

"An individual appointed as additional director pursuant to section 260 holds office and does not retire by rotation at the AGM of the company and he is required to comply with the provisions of section 257 for seeking election as director at the said meeting. The provisions of section 264 and 303 are also required to be complied with."

further,in letter no 8/53(173)/65-CL-V, dated 1-9-1965, a clarification was made::

"the appointment of directors in the place of those retiring is an item of ordinary business to be transacted at the AGM of a company, vide section 173(1)(a). the retirement as contemplated by the said section may be by rotation, efflux of time or otherwise. If, therefore, additional director appointed by the Board of Directors ceases to hold office under section 260 and if such director is to be re-appointed as director at the annual general meeting, the provisions of section 173(1)(a) would become attracted in the matter."

It should be noted that the consent to act as director as required by sections 264(1) and 264(2) is not necessary for appointing additional directors.

section 260 applies to private companies as well.

the appointment of additional director would be a matter of ordinary business at the AGM

Can anyone please provide the format of Notice given by a member under section 257 of the Act..

can one member propose the name of two directors?

You have to give two seperate notice to propose 2 directors.