Re-appointment of MD

[Deepesh Nayak]

Dear Members,

A Company has appointed Mr. X as MD (without any Remuneration) in November' 2010 for three years, which term is expiring in the 15th November' 2013. Now, the BOD want to further appoint him for another three years period with effective from 16th November, 2013.

Now, my query is:

 "Whether we can pass a Board Resolution, before expiring the term i.e. before 15.11.2013???"

Other details are:

Next Board Meeting date is 06.05.2013 , wherein the resolution for re-appointment of Mr. X will be taken place.
Next AGM date is 31.07.2013, wherein the said appointment will be confirmed by the members.

Kindly suggest me on the matter.

Regards,
Deepesh

[Rajiv Pandya]

As per my point of view you can go ahead.

With Regards,

Rajiv Pandya
Company Secretary

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[CS Alpesh Dhandhlya]

As per Act, the MD can be re-appointed at anytime but earlier NOT than 2 years from the date when his term expires.  hENCE IN YOUR CASE THERE IS ALREADY time period of less than one so you can very well do so.

[dheeraj gupta]

I m completly agree with Rajiv view. you can reapppint MD before the expiry of his terms.

[Deepesh Nayak]

Thanks to all of you, could any one provide the relevant resolution for the same.

Regards,

Deepesh

Thanking you,

*Deepesh Kumar Nayak*
 Company Secretary
 STI India Limited
 Indore (Madhya Pradesh)
*Mob. 097134-80215*
*csdeepe...@gmail.com*

[Vishwas Hegde]

In the same case what about If the Date opf Reappointment is 19th April and Board meeting is on 25th April.

 

1. can we have the agenda of Reappointment in the Board meeting to be held on 25th.

With regards,
ಆ ರವಮಂ ನಿರ್ಜಿತಕಂ
ತೀ ರವರವಮಂ ನಿರಸ್ತ
ಘನರವಮಂ  ಕೋಪಾರುಣನೇತ್ರಂ
ಕೇಳ್ದಾ
ನೀರೊಳಗಿರ್ದುಂ ಬೆಮರ್ತನ್
ಉರಗಪತಾಕಂ !!!!
THANK YOU,
VISHWAS HEGDE

[Deepesh Nayak]

Hello Vishwas,

if you are using the the word "Date of Re-appointment" then its construed that re-appointment will be effective from 19.04.2013 and not from 25.04.2013.

If in your case the tenures of yours MD's get expiring on the 19.04.2013, in that case you will have to pass resolution before 19.04.2013 nd not after that.

However, for taking confirmation of Members through AGM or EGM, i am still confuse that the same is also requires before expiring the tenure or it can be later.???

Please suggest.

Regards,

Deepesh

[Vishwas Hegde]

Dear Deepesh,

 

I got the point. I need to call a Board meeting first and then fix a EGM on or before 19th April.

 

As per my knowledge, it may be Either an AGM or EGM. but, After appointment we shloud file Form 32 within 30 days of appointment and Form 23 within 30 days of EGM/AGM and Form 25C within 90 days of Appointment. 

[Deepesh Nayak]

Dear Vishwas,

In the case of re-appointment of MD, You need to file two forms viz:

01. Form 25C/25A, as the case may be, within 90 days from the date of passing of BR, and

02. Form 23 within 30 days from the date of BR.

Form-32 is not required in case of re-appointment of MD as there is no change in composition of board of director.

Further, General meeting may be a EGM or AGM.

Regards,
Deepesh

[Vishwas Hegde]

Hey,

 

thanks a lot for the Clear cut Clarification.

[CS Shainshad Aduvanni]

Dear Vishwas,

A managing director may be appointed by a resolution passed by its Board of directors of a company or by an ordinary resolution passed by the company in general meeting. However, if the appointment is made by a resolution passed by the Board of directors of a company, his appointment and remuneration shall be subject to approval by a resolution of the shareholders in general meeting [Paragraph 1 of Part III of Schedule XIII to the Companies Act, 1956]. Sub-section (2) of Section 269 provides that no appointment of a person as a managing director (or whole-time director or manager) in a public company or a private company which is a subsidiary of a public company shall be made except with the approval of the Central Government. However, approval of the Government is no t necessary if the appointment is made in accordance with the conditions specified in Parts I and II or Schedule XIII (the said parts being subject to the provisions of Part III of the said schedule) and a return in the prescribed form viz. Form 25C is filed with Registrar within 90 days from the date of such appointment. Procedure for Managing Director’s Appointment First of all, the company must ensure that the appointment is made strictly in accordance with the conditions specified in Parts I and II of Schedule XIII to the Companies Act (the said Parts being subject to the provisions of Part III of that Schedule) and a return in e-form 25C, as prescribed in the Companies (Central Government’s) General Rules and Forms (Amendment) Rules, 2006, is filed with the Registrar of Companies and the prescribed filing fee is paid along with the application, within ninety days from the date of such appointment. Otherwise the appointment shall be made subject to the approval of the Central Government [Section 269(2)]. It may be noted that under Section 316 of the Act, a public company can not appoint or employ any person as managing director, if he/she is either the managing director or the manager of more than one other company. It may also be noted that Section 317 of the Act limits the term of office of a managing director to five years. However, the term may be extended by further periods not exceeding five years on each occasion. The following steps shall be taken. 1. Convene and hold a Board meeting after giving to all the directors due notice    as required under Section 286 of the Companies Act, for transacting, inter    alia, the following business:-    (a) take a decision on the person to be appointed as managing director after         fully ensuring that he does not suffer from any disqualification mentioned         in Sections 267 and 274 of the Act or disability mentioned in Sections         316 of the Act;    (b) approve the draft agreement to be signed and executed by and between         the company and the proposed managing director (it is not mandatory);    (c) fix time, date and venue for holding a general meeting of the company;    (d) approve notice of the general meeting along with the explanatorystatement as required by Section 173(2) of the Act; and (e) to authorise company secretary to issue notice of the general meeting on     behalf of the Board. 2. Send three copies of the notice to the stock exchanges on which the    securities of the company are listed as per the Listing Agreement signed with    them. 3. Hold the general meeting and get the resolution passed approving    appointment of the managing director. 4. In case the appointment of the managing director is not in accordance with    the provisions of Schedule XIII of the Act, the company is required to obtain    approval of the Central Government as per Section 269(2) of the Act. For    getting the approval of the Central Government under Section 269 certain    formalities are to be complied with: (a) As required by Section 640B of the Act, the Company shall give a     general notice to the members of the company indicating the nature of     the application proposed to be made and this notice has to be published     atleast once in the principal language of the district in which the     registered office of the company is situate, and circulating in that district     and also once in English in an English newspaper also circulating the     company shall attach a copy of this notice with the application together     with certificate as to the due publication thereof. (b) The application should be in e-form 25A of the Companies (Central     Government' General Rules and Forms, 1956, accompanied by thes)     prescribed fees as per the Companies (Fees on Application) Rules, 1968. (c) As per Rule 20A of the Companies (Central Government' Generals)     Rules and Forms, 1956, a copy of the application made to the Central     Government together with a copy of each document enclosed therewith     has to be filed simultaneously with the Registrar of Companies     concerned. Rule 20A also provides that any person having any objection     to the proposal of the company relating to the appointment of the     managerial personnel as contained in the notice issued by the company     may communicate his objection in writing to the Secretary, Department of     Company Affairs, New Delhi as early as possible after the publication of     the notice in newspapers. The Central Government will not consider any     objection received after the expiry of 30 days from the date of publication     of the notice. 5. Execute the agreement, as approved by the Board, with the managing    director. 6. To obtain from the managing director notice in Form No. 24AA about his    appointment as director, managing director, manager or secretary in other companies for making required entries in the records of the company [Refer Section 305 of the Act]. 7. Make necessary entries in the register of directors etc. and other records and    registers of the company. 8. File the following documents with the ROC: (a) The company should file with the ROC return of appointment of the     managing director in e-form 25C, within ninety days of the appointment     and the return must be certified by the auditors of the company or the     company secretary or a secretary in whole-time practice. The Mandatory attachments for e-form 25C: — Copy of Board resolution is to be attached. — Copy of share holder resolutions-if any.

​

SPECIMEN OF BOARD RESOLUTION APPOINTING MANAGING DIRECTOR

"RESOLVED THAT—

(i) in accordance with Sections 198, 269 and 309 and other applicable     provisions, if any, of the Companies Act, 1956 and Schedule XIII to the Act     and subject to the approval by a resolution of the shareholders in general     meeting, Shri ..................…........... be and is hereby appointed as Managing     Director of the company for a period of five years commencing from     .............................. and ending on .............................., on the terms and    conditions contained in the agreement, draft whereof was laid on the table of     the meeting and initialled by the chairman of the meeting as a mark of     identification, and the same agreement be executed by the and between the     company and Shri .............................. on the day of the managing director     assuming the charge of the office;

(ii) Shri .............................. Director of the company, be and is hereby authorised      to sign and execute, on behalf of the company, the agreement with Shri      .............................. which shall be executed under the common seal of the company to be affixed in the presence of, Shri .............................. Director and Shri .............................., Secretary of the company, who shall sign the same, and

(iii) Shri .............................., Company Secretary, be and is hereby authorised to       prepare, sign and file with the concerned Registrar of Companies with the       prescribed filing fee, the following documents:

(a) return is eForm No. 25C for the appointment of the Managing Director as     per requirement of Sub-section (2) of Section 269 of the Companies Act,     1956 and Part III of Schedule XIII to the Companies Act, 1956, duly     certified by the auditor or the company secretary or secretary in whole    time practice that the requirements of Schedule XIII have been complied     with and such certificate shall be incorporated in the return, to be filed     within ninety days of the passing of this resolution;

(b) eForm No. 32, in duplicate, in respect of the appointment of the     managing director within thirty days of the passing of this resolution; and

(c) eForm No. 23 along with a certified copy of the foregoing resolution for     registration of the resolution as required under Section 192 of the     Companies Act, 1956, within thirty days of the passing of the resolution.

SPECIMEN OF ORDINARY RESOLUTION APPOINTING MANAGING DIRECTOR

"RESOLVED that pursuant to the provisions of Sections 198, 269 and 309 read with Schedule XIII and all other applicable provisions, if any, of the Companies Act, 1956 including any statutory modification or re-enactment thereof and subject to such approvals as may be necessary, approval of the members of the company be and is hereby accorded to the appointment of Shri ............................ as the Managing Director of the company for a period of five years with effect from 1st January, 2003 upon the terms and conditions including remuneration as set out in draft agreement submitted to this meeting and initialled by the Chairman for the purpose of identification, which agreement be and is hereby approved and sanctioned with the authority to the Board of directors of the Company to alter and vary the terms and conditions of the said appointment and/or agreement in such manner as the Board may deem fit and as may be acceptable to Shri.........................., the Managing Director.

RESOLVED further that the Board of directors of the company be and is hereby authorized to do all such acts deeds and things and execute all such documents, instruments, and writings as may be required to give effect to the aforesaid resolution."

Explanatory Statement

The Board of directors of the company at their meeting held on .................... appointed Shri ....................... as the Managing Director of the Company for a period of five years effective from 1st January, 2003 on the terms of appointment and remuneration payable to Shri...................., Managing Director of the company as are specified in the draft agreement to be executed between him and the company, a copy of which (as has also been duly approved by the Board) will be placed before the meeting and is subject to the approval of the shareholders and other approvals, if any, as may be necessary.

The principal terms of appointment and remuneration of Shri.................. are as follows:      1. Salary: ...............................................................…………………….....      2. Commission: .................................................................……………….      3. Perquisites, allowance and other benefits: .........................................      4. Minimum Remuneration: ....................................................................

Notwithstanding anything to the contrary herein contained, where in any financial year, the company has no profits or its profits are inadequate, the company will pay Shri........................, the Managing Director of the company, the remuneration by way of salary, perquisites and allowances as specified above subject to the approval of the Central Government if required.

he Managing Director shall also be entitled to reimbursement of expenses actually incurred by him for the business of the company. He shall not be paid any sitting fees for attending meetings of the Board or Committee thereof.

Shri......................., Managing Director shall not be liable to retire by rotation. The resolution is recommended for your approval.

copies of the Memorandum and Articles of Association of the company, draft agreement to be entered into between the company and Shri....................., Managing director duly approved by the Board, and all other relevant documents and papers are open for inspection at the Registered Office of the company between 10.00 a.m. to 12.00 noon on any working day prior to the date of the meeting.

None of the directors of the company except Shri................. is concerned or interested in the resolution.

​

Shainshad Aduvanni
Company Secretary
Coimbatore

09841414439
0422-2434491/92/93

​ ​

[Vishwas Hegde]

Thanks for the Valuable Guidence sir....

[krishna ds]

Dear,

This subject may be deliberated at the next Board Meeting giving effect from the closure of his term.  Also, pls insert this item in the notice and explanatory note of the forthcoming agm.  After AGM,  file the requisite forms.

On Mon, Apr 1, 2013 at 5:33 PM, Deepesh Nayak <csdeepe...@gmail.com> wrote:

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Thanks & Regards...?

D S Krishna

Mobile: 94480 18302

[Vishwas Hegde]

thanks Krishna :)

[Deepesh Nayak]

Good Morning all,

If we consider the matter of Re-appointment of MD's in the coming Board Meeting on 15th May' 2012 and then get confirm re-appointment in the next AGM on 31.07.2013, before expiring the term of MD i.e. before 15.11.2013 it ok.

But, if we decide that the same should be done after AGM i.e. 31.07.2013, then we will have only option to hold board meeting before 15.11.2013 say 14.11.2013 and for confirmation of the Shareholders in the GM we will have to wait for till next AGM of 2014.

Can we go with the second option, mean can we take the confirmation of members after expiring the term of MD (15.11.2013)????

Regards,

Deepesh

[CS Shainshad Aduvanni]

Dear Deepesh,

Please see Resolution passed by a Listed Company for your reference.

Notice is hereby given that the Forty Fourth Annual General Meeting of the Company will be held at Baba Saheb Dahanukar Hall, Maharashtra Chamber of Commerce, Industry & Agriculture, Oricon House, 6th Floor, 12, K. Dubhash Road, Fort, Mumbai - 400 001 at 4.00 p.m. on Tuesday, 30th September, 2008 to transact the following business:

SPECIAL BUSINESS
5) To consider and, if thought fit, to pass with our without modifications, the following resolution as an Ordinary Resolution:

“RESOLVED THAT pursuant to sections 198, 269, 302, 310 and 311 read with Schedule XIII and other applicable provisions if any, of the Companies Act, 1956, and subject to the approval, if any, as may be necessary, consent of the Company be and is hereby accorded to the re-appointment of Mr.P.K.Choudhary as Managing Director of the Company for a period of 3 years w.e.f 18th March 2008, on the terms and conditions as set out in the
Explanatory Statement attached to this Notice, be and is hereby approved, with liberty to the Board of Directors to revise the terms with regard to remuneration, from time to time, within the limits provided for in the said Schedule XIII or any amendment thereof for the time being in force.

RESOLVED FURTHER that the Board of Directors of the Company be and is hereby authorized to take such steps as may be necessary to give effect to this resolution.”

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[Deepesh Nayak]

Thanks to all of you... :-)

Please also clear a li'l doubt, whether confirmation of members can be taken after expiring the terms of appointment say 15th November, 2013???

Thanks again.....