Item: Draft Agreement For The Appointment of Managing Director
Author: Muhammed Fasil K

draft-agreement-for-appointment-of-managing-director-under-companies-act-2013

Draft Agreement For The Appointment of Managing Director

This agreement is made on this …… day of ………… 20__, between ………………………., a company incorporated under the Companies Act, 2013 and having its Registered office at ………………………………, (Hereinafter called “the Company”) of the one part and Mr. …………… (DIN: ------------) (Hereinafter called “the Managing Director”) of the other part.

WHEREAS --------------- satisfies the conditions specified in Schedule V to the Companies Act, 2013, and other relevant provisions of the Act;

WHEREAS the Board of Directors of the company has at its meeting held on ________ appointed -------------- as the Managing Director of the company for a period of ____ years from --------------- on the terms and conditions and subject to the remuneration approved by the Board of Directors and set out hereunder, and

WHEREAS ----------- has accepted the said terms and conditions of the appointment.

1. The Company hereby appoints Mr. ---------------------------- (DIN: -------------) as Managing Director of the Company and the Managing Director hereby agrees to serve the Company in such a capacity for a period of ……….. years with effect from ------------------.

2. The Managing Director shall exercise and perform such powers and duties as the Board of Directors of the Company (hereinafter called “the Board”) shall from time to time determine, and subject to any directions, and restrictions, time to time given and imposed by the Board, he shall have the general control, management and superintendence of the business of the Company and to enter into contracts on behalf of the Company in the ordinary course of business and to do and perform all other acts and things, which in the ordinary course of business he may consider necessary or proper or in the interest of the Company.

3. The Managing Director shall throughout the said term devote the whole of his time, attention and abilities to the business of the Company, and shall obey the orders from time to time, of the Board and in all respects, confirm to and comply with the directions and regulations made by the Board, and shall well and faithfully serve the company and use his utmost endeavors to promote the interest thereof.

4. The Company shall pay to the Managing Director during the continuance of this Agreement in consideration of the performance of his duties.

i. A salary at the rate of Rs. -------------- (Rupees ------------- only) per month w.e.f-------------------, which may be reviewed by the Board.

ii. The company shall provide the Managing Director with rent free furnished accommodation and will pay electricity and water charges;

iii. The Managing Director shall be entitled to use the company's car, all the expenses for maintenance and running of the same including salary of the driver to be borne by the company;

iv. The Managing Director shall be entitled to participate in provident fund, gratuity fund or such other schemes for the employees, which the company may establish from time to time.

v. Reimbursement of medical and hospitalization expenses of the Managing Director and his family in accordance with the Company policy.

vi. LeaveTravel Allowance for the Managing Director and his family once in a year in accordance with the Company policy.

Vii. Bonus for the financial year, at the discretion of the board.

Viii Reimbursement of expenses incurred by him on account of business of the Company in accordance with the Company policy.

ix. Reimbursement of any other expenses properly incurred by him in accordance with the rules and policies of the Company.

x. The Managing Director shall be entitled to such increment from time to time as the Board may by its discretion determine.

6. The Managing Director shall not, during the period of his employment and without the previous consent in writing of the Board, engage or interest himself either directly or indirectly in the business or affairs of any other person, firm, company, body corporate or in any undertaking or business of a nature similar to or competing with the company's business and further, shall not, in any manner, whether directly or indirectly use, apply or utilize his knowledge or experience for or in the interest of any such person, firm, company or body corporate as aforesaid or any such competing undertaking or business as aforesaid.

7. The Managing Director shall not, during the continuance of his employment with the company, divulge or disclose to any person, firm, company or body corporate whomsoever or make any use whatever for his own or for whatever purpose, of any confidential information or knowledge obtained by him during his employment as to the business or affairs of the company or as to any trade secrets or secret processes of the company and the managing director shall, during the continuance of his employment hereunder, also use his best endeavors to prevent any other person, firm, company or body corporate concerned from doing so.

8. Either party shall terminate this agreement by giving to the other advance notice of three months, provided that the company may waive the notice by giving in cash the remuneration for three months which the managing director would have received had he remained in office for the said three months.

9.The Managing Director shall, from time to time, during his employment hereunder fully disclose to the company the progress of investigations and of any discoveries he may make himself or in conjunction with other officials or non-officials with regard to any improvement, invention or discovery arising out of or in connection with the said employment, he shall forthwith disclose to the company a full and complete description of the nature of said improvement, invention or discovery and the mode of performing the same.

10. This agreement and the terms and conditions hereof shall be subject to the approval of the shareholders of the company in general meeting and also of the Central Government under the relevant provisions of the Companies Act, 2013 if necessary.

In witness whereof the parties hereto have set their hands the day, month and year first above written.

For …………………………………

(Name of Director) (Name of MD)

DIRECTOR Managing Director

DIN: --------- DIN: --------------

Add: -------------------- Add:---------------

Witness

........................................ ........................................

……………………….. …………………………

Note : This Draft Agreement For The Appointment of Managing Director is only for the reference, kindly make necessary changes as applicable in the given case.

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