Employee of one Company - Executive Director of other Company

[vinay bl]

Dear Members,

Is there any provision in the Company's Act, 1956 which allows a salaried employee of one Company to become the "EXECUTIVE DIRECTOR" of other Company. Kindly let me know with reasoning and case laws if any.

As per my understanding It is not possible even if the earlier Company provides the No objection Certificate, since Executive Director is a whole time employee of the Company. Kindly educate me on this.

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Thanks and Regards

Vinay B L

[CS Priyanka Singh]

As per my knowledge Executive Director is Whole Time Director  of the Company and also gets salary form the same  Company. So ED is employee of the company at the same time Executive Director too.

 Companies  Act, 1956 do not define the word Executive Director but if we go through the definition of WTD it means ED also.

I think if you want to make any employee as ED first he should be director 

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[vinay bl]

Dear Ms. Priyanka,

Thank you for the mail. I think my question is mis understood. I am a salaried employee of M/s Ram Private Limited. Can I become the EXECUTIVE DIRECTOR of M/s Shyam Private Limited, when Ram Private Limited, is ready to provide the NOC. Kindly clarify.

[Parth Arya]

No, a salaried employee of one Company cannot be the salaried employee of another company until and unless he has resigned from the previous company. That means, a salaried employee of one company cannot be the "Executive Director" of another Company. Optionally, he could be the "Independent Director" of another Company and draws sitting fees instead. 

[Mahesh Shinde]

Agree with Mr. Parth. Option of Independent Director is always open but when you appoint a person as ED (WTD) it is presumed that he is in whole time employment of the Company (though might not be). As such 'logically' one person cannot serve as employee of two different companies.

Thanks & Regards,

Mahesh Shinde

[Venkat Ragavan]

If both are private company you can

Regards

V.Venkat

[Venkat Ragavan]

I think the both are private company you can but you are not eligible to claim salary from both except sitting fees.

Correct me if i am wrong

Regards

V.Venkat

[Indrani Sanka]

Hi, Not possible....

On Thu, May 9, 2013 at 3:49 PM, CS Priyanka Singh <priyanka...@gmail.com> wrote:

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Regards,

Indrani

[vinay bl]

Dear Members,

Thank you