Employee being given the designation of Director

[disha halani]

Hi Friends,

 

I have a doubt. If any Company gives its employee a designation of Director for Finance or Marketing, but does not appoint him on the Board, he is not actually the Director. I think it is not legally correct. Is there any circular or notification clarifying on this point?

 

Please reply as soon as possible.

 

Thanks in advance,

Disha

[Rajesh Warrier]

Dear Disha,

 

Please find extract of the circular:.

 

Instances have come to the notice of the Department where companies have designated executives who are not members of the Board as special director, director administration etc. Such designations give an impression to public at large and those dealing with these companies and the executives that they are full-fledged directors entitled to act as such on behalf of the company. In fact these executives are not directors on the board of the companies, it will be patently wrong on the part of the companies to designate them as directors. The Department is, therefore, constrained to advise companies to desist from giving such designations to their executives which tend to mislead.

 

Circular No: 2/82 dated 20-01-1983

 

Hope it suffice your requirements...

--
Thanks
Regards
Rajesh A
Company Secretary
Kochi
Mob: 09846874314

[disha halani]

Thank you  very much.

 

Regards,

Disha

[Raman Rengan]

Yes, there is a circular advising companies not to designate employees as directors when they are not members of the Board. I shall send you the circular later if you could let me know your mail id.

Regards,

R. Raman

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From: disha halani <disha...@gmail.com>
To: csmy...@googlegroups.com
Sent: Thursday, 30 April, 2009 14:48:04
Subject: [CSMysore] Employee being given the designation of Director

[Raman Rengan]

Thanks Rajesh for citing the circular.

Regards,

R. Raman

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From: disha halani <disha...@gmail.com>
To: csmy...@googlegroups.com

Sent: Thursday, 30 April, 2009 15:36:44
Subject: [CSMysore] Re: Employee being given the designation of Director