Dear Experts,
ABC private Limited have appointed one additional director Mr. X in the BOD of the Company. Now Company wants Mr. X will be on the Board of the Company and members does not rose any objection and they are ready to regulariise Mr X. in the AGM. Now question arise that, Do Mr. X have to give Rs. 1,00,000/- as an deposit with the Company ?
Kindly through some lights on this query and do the needful.
Thanking you.
As per section 160 of CA 2013, a person shall be eligible to be appointed as the director in the general meeting if he or any member propose that person ot be a director by sending a notice at registered office of the company at elast 14 days before the meeting along with deposit of rs. 1 lakh.
hence, any appointment made in agm is not as per the act, therefore the appointment is not valid and the company and its officers can be punished under section 172 of the CA 2013
Thanks a lot Sir.
But my query is still open. Do Director have to give Rs.1,00,000/- as an security deposit while regularzing of his position from Additional Director to Director.
Thanking you
Yes, deposit is mandatory. As per Section 160 deposit of Rs.1 lac can be given either by the director himself or some member intending to propose him as a director.
Thank you so much sir.
CAclubindia
