Procedure For Appointment of Whole Time Director

     

Section 196(4) provides that subject to the provisions of section 197 and Schedule V of the Companies Act, 2013, a managing director, whole-time director or manager shall be appointed and the terms and conditions of such appointment and remuneration payable be approved by the Board of Directors at a meeting which shall be subject to approval by a resolution at the next general meeting of the company and by the Central Government in case such appointment is at variance to the conditions specified in that Schedule.

Procedure For Appointment of Whole Time Director

1.  Convene Board Meeting after giving notice to all the directors [Section 173] to discuss besides others the following matters.

•   Approve the terms and conditions on which the Managing Director/ Whole Time Director/ Manager is proposed to be appointed.[ Subject to the provisions of section 196,197 and Schedule V]

•   In case the appointee has  completed the age of 21 years, but has attained the the age of 70 years, provided that appointment of person who has attained the age of seventy years may be made by passing a special resolution in the AGM/EGM and [form No.MGT-14] has to be filed with the ROC.

•    To decide the day, time, venue of the General Meeting.

•    To approve the notice of general meeting.

•   To authorise the Company Secretary or any director of the company to issue the notice of general meeting.

•   Issue and dispatch notices in writing at least 21 clear days before the date of the General Meeting  [Section101] [Agenda]

2.  Obtain a [written consent] [Section 152(5)] from the person who is to be appointed as Managerial personnel.

3.  Ensure that the appointment is made in accordance with the conditions specified in [Schedule V]

4.  Inform the Stock Exchange with which shares of the company are listed about the date of this meeting prior to the board meeting. [Clause 19 of the Standard Listing Agreement]

5. Inform the said Stock Exchange within 15 minutes of the board Meeting, of the outcome of the meeting by letter or fax.

6.  Authorise Company Secretary or any director of the Company to issue the[notice of General Meeting] to all the Shareholders, auditors and directors at least 21 clear days [Section101] before the date of Annual General Meeting.

7.  Alternately, an annual general meeting may be called up by giving a notice shorter than 21 days [Section101], consent is given in writing or by electronic mode by not less than ninety-five per cent. of the members entitled to vote at such meeting.

8.  In case of listed companies forward to the Stock Exchange promptly three copies of the notice and a copy of the proceedings of the General Meeting. [Clauses 31(c), (d) and 33 of the Standard Listing Agreement]

9.  Hold and convene a General Meeting and pass an [Ordinary resolution], [Section 114] if the Articles of Association of your company require passing of Special Resolution for such appointment, then pass a special resolution with three-forth majority [Section 114].In case the of Special resolution see [Section117]

10.  File Form MGT-14  within 30 days from the date of General Meeting.

11.  File Form DIR-12 within 30 days of appointment.

12.  Fees can be paid through ebanking/NEFT

13. Such Director need to  make a [intimation] in the first board meeting to the other companies in which he is already a director, Managing Director, manager, Secretary. (Section 184)

14.File [Form MR-1] with the concerned ROC within 60 days from the date of Appointment.( Pursuant to Section 196 read with Section 197 and Schedule V of the Companies Act, 2013 and pursuant to Rule 3 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014]

15. Make necessary entries in the Register of Directors and in the Register of Director’s Shareholding. [Section 170 ]

16.Notify the Stock Exchange with which shares of the Company are listed about the change in the company directors [Clause 30(a) of the Standard Listing Agreement]

Related Post :

Draft Board Resolution for appointment of Whole Time Director

Draft Ordinary Resolution for appointment of Whole Time Director

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