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Vacation of director

CS Arvind meena (Corporate Law Consultant) (174 Points)

06 October 2012

There is a provision in the article of public company that a director may vacate his office by resign.examine validity of provision.. Tell me also in case of private company...

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Smriti Dhawan (Company Secretary ) (347 Points)
Replied 06 October 2012

If the articles contains a provision for resignation of Director, then the said procedure has to be complied accordingly.

A director of a public company or a private limited company can tender his resignation unilaterally, without filing Form 32 and without sending notice to the Registrar of Companies. director has to send in writing a letter informing either the Chairman or the Secretary of the Company of his intention to resign from the office of director. Filling in Form 32 and giving intimation to the Registrar is the duty of the Company Secretary and not of the director who has resigned.

CS Arvind meena (Corporate Law Consultant) (174 Points)
Replied 06 October 2012

Thank u maam.. I have one more query.. There is a provision in the article of a private ltd company that for being a director of company must hold share for 2 months... Is it valid??

Shabnam Siddiqui (Company Secretary) (152 Points)
Replied 06 October 2012

A director can resign from his office and that shall be considered as casual vacancy u/s 262. Article can provide the terms of appointment of removal of directors and that is valid. Proviso related to qualification shares [read section 270(1)] is also valid under that act. Further, if the director has failed to obtain qualification shares withiin the stipulated time, his office shall become vacant u/s 283.

Smriti Dhawan (Company Secretary ) (347 Points)
Replied 06 October 2012

Mr. Arvind

This provision is valid to hold qualification shares for 2 months , if the condition is not such that he should have qualification shares in a period not less than 2 months from the date of appointment.

Directors has been given time of 2 month to have qualification shares from date of appointment if there is any condition in articles that he should have qualification shares within a period less than two month this condition is not valid as Stipulated in Section 270(2) of Companies Act.

Kindly check the time period of 2 months is for obtaining qualification shares or for holding qulaification shares for 2 months.

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CA Manish (Job) (5264 Points)
Replied 06 October 2012

Originally posted by : Smriti Dhawan
	Mr. Arvind This provision is valid to hold qualification shares for 2 months , if the condition is not such that he should have qualification shares in a period not less than 2 months from the date of appointment. Directors has been given time of 2 month to have qualification shares from date of appointment if there is any condition in articles that he should have qualification shares within a period less than two month this condition is not valid as Stipulated in Section 270(2) of Companies Act. Kindly check the time period of 2 months is for obtaining qualification shares or for holding qulaification shares for 2 months.

As per Section 273 of the Act sec 270 and 272 related to qualification shares and time limit are not applicable to a pvt ltd co.

Smriti Dhawan (Company Secretary ) (347 Points)
Replied 06 October 2012

Thanks for correction Mr.Manish, Section 270 is not applicable to Pvt. Company.

(Guest)

Section 274 (3) provides that private company can provide additional disqualification for appointment as director other than as per clause 274 (1) (a) to (g)

So this restriction is valid.

Smriti Dhawan (Company Secretary ) (347 Points)
Replied 06 October 2012

Dear Neha

As mentioned in Sec 273 of Companies Act, that Section 270 in which there is restriction with regard to minimum time limit and amount for qualification shares , this section does not apply to Private limited Company.

(Guest)

Originally posted by : Smriti Dhawan
	Dear Neha As mentioned in Sec 273 of Companies Act, that Section 270 in which there is restriction with regard to minimum time limit and amount for qualification shares , this section does not apply to Private limited Company.