Appointment of Nominee Director as Additional Director

[harshavardhan boratti]

Hi All,

 

Please clarify Can a person acting as a Nominee Director also be appointed as a Additional Director in the same Board ?

 

 

 

Regards,

Harshavardhan.

[anandteerth hipparagi]

Dear Harsha,

 

Nominee director cannot be appointed as additional director on the same borad. This is because he is nominated by the institution on the Board of the Co. Hence he cannot act in capacity of another director under section 260 of the Co. Act 1956

 

Correct me if i m wrong.

 

REgards,

 

Anandteerth

[SUNIL KUMAR]

Dear Harshvardhan,

 

This may clarify your doubts regarding Nominee Director

 

Department Clarification on Section 260 - Additional directors

358/SEC. 260 : Directors - Additional - Whether additional director ceases to hold office as such immediately before next annual general meeting - Words "up to" occurring in the first proviso - Interpretation of

The Department is advised that under section 260 as additional director appointed by the board of directors of a company ceases to hold office as additional director immediately before the commencement of the next annual general meeting of the company as contemplated by section 260 and in any event he cannot continue in office after the expiry of the statutory period laid down in section 166 for holding an annual general meeting of the company.

The words "up to", occurring in section 260, ordinarily convey the same meaning as "until". The word "until" may, according to the context, be read as inclusive or exclusive of the date named. Where the articles of a company provide that additional directors shall hold office "only until the next following ordinary general meeting of the company", it has been held that the moment when such meeting began, additional directors were no longer in office and their office ceased just before the meeting—Eyre v. Milton Proprietary [1936] Ch. 244 (CA). It may thus be inferred that additional directors were appointed by the board of directors to hold office just before the commencement of the next annual general meeting of the company. If it were intended that they should hold office until the conclusion of the next annual general meeting of the company (which generally takes place on the same day on which such meeting is convened and held), different languages would have been used by the Parliament in section 260. In this connection, the language used in section 224(1) regarding the appointment of auditors may be noted by way of contrast.

Letter : No. 8/3(260)/63‑PR, dated 5‑2‑1963.

359/SEC. 260 : Directors ‑ Additional ‑ Whether provisions of section 257 will have to be complied with when additional director is elected as director at next annual general meeting

In the case of an additional director appointed by the board of directors under section 260, the provisions of section 257 thereof will have to be complied with on his election as a director at the next annual general meeting, since he cannot be considered to be a director retiring by rotation at that meeting.

 

 

 

 

Thanks & Regards,

 

Sunil Kumar B.G.

[Pracheta]

I also believe that a Nominee Director cannot be appointed as Additional Director on the same Board. The simple reason being that he is already a Director on the Board. An additional Director is an 'addition' to the Board. So, i dont think that any of the present Directors can be appointed as the Additional Directors.

 

Regards,

Pracheta

 

On 8/21/08, anandteerth hipparagi <anand...@gmail.com> wrote:

[Kasturi Sastry]

Dear Harshavardhan,

 

Please explain why do you want to appoint a nominee director as additional director?  According to you, it can be a solution to your which problem ?  

 

Your explanation may trigger some ideas of our friends to solve the issue.

 

Best Regards,

Kasturi S

--
Kasturi.S
Company Secretary
9901952524

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PROMAC ENGINEERING INDUSTRIES LIMITED,
Alahalli, Anjanapura post, Off Kanakapura Road,
Bangalore - 560 062.
Ph: 080-26330372.