CHECKLIST FOR APPOINTMENT OF MANAGING DIRECTOR
The following are the steps
involved in appointment of Mr. A as Managing Director in a Company who is not
an Managing Director in any other Company:
1-
Convene Board Meeting, appoint Mr. A as Additional
Director and pass resolution for appointment as Managing Director (sample of
resolution specified hereunder) and fix date and approve notice of General
Meeting for passing ordinary resolution or special resolution, as the case may
be (explained hereunder)
2-
File Form 32 for app. as Additional Director (with his
consent in case of public Company)
3-
Issue notice along with explanatory statement (sample
of exp. St. specified hereunder) at least 21
days before the Extra-Ordinary General Meeting/Annual General Meeting
4-
Hold the General Meeting and appoint Mr. A as Director
u/s 257 and appoint him as Managing Director by ordinary resolution (sample
specified hereunder).
5-
If the prospective Managing Director is of < 25 yrs.
of age but > 18 yrs. or > 70 yrs. of age then appointment has to be
approved by Special Resolution in General Meeting.
6-
Ensure that appointment is in accordance with the
provisions of Schedule XIII to the Companies Act, 1956 otherwise Central
Government approval is required by making an application in Form 25A.
7-
File Form 23 within 30 days of passing resolution for
appointment even if ordinary resolution is passed (See Section 192)
8-
File Form 32 within 30 days of app. for change in
designation from Additional Director to Managing Director.
9-
File Form 25C(return on appointment of managing
director) within 90 days of appointment
10- Make
necessary entries in the Register of Directors
NECESSARY RESOLUTIONS:
1- Board Resolutions –
a-
For
Appointment as Additional Director:
“RESOLVED
THAT pursuant to section 260 of the Companies Act, 1956 and other applicable
provisions of the Act and Article ________ of Article of Association of the
Company Mr. A be and is hereby appointed as Additional Director of the Company
to hold the office up to next Annual General Meeting and be eligible for
reappointment at next Annual General Meeting.
Resolved Further
That necessary Return in the office of the Registrar of Companies be filed to
intimate the above appointment.”
b-
For
Appointment as Managing Director :
“RESOLVED THAT
pursuant to provisions of Section 269 read with Schedule XIII of the Companies
Act, 1956 and subject to provisions of Sections 198,309,314 and other
applicable provisions, if any, of the Companies Act, 1956 and further subject
to approval of shareholders, sanction be and is hereby accorded to the
re-appointment of Mr. A as Managing Director of the Company for a period of 1
(one) year with effect from 1st April,_________ and to the payment of the
following remuneration:
a) Salary Basic Rs
__________ PM
b) Conveyance on
actuals upto a limit of Rs
__________ PM
c) House Rent Rs
__________ PM
RESOLVED FURTHER
THAT in the event of loss or inadequacy of profits during the tenure of service
of the Managing Director, the payment of salary, commission, perquisites and
other allowances shall be governed by the limits prescribed under Section II of
Part II of Schedule XIII to the Companies Act, 1956.”
2- Explanatory Statement (Forming Annexure
to Notice)
The Board, subject to the approval of
shareholders in the General Meeting, appointed Mr. A as Managing Director of
the Company effective 1st April _____________, for a period of one year on terms and conditions set
out in the Resolution. He is a partner of _______________, an associate concern
of the Company and Director in ________________ Ltd.
The remuneration as set out in the resolution
is in accordance with the provisions of Schedule XIII to the Companies act,
1956.
The Board recommends the resolution for
approval of Members.
None of the
Directors, except Mr. A is concerned or interested in the resolution.
3- General Meeting Resolutions:
a-
For
Appointment of Mr. A as Director u/s 257:
“RESOLVED
THAT Mr. A be and is hereby appointed as a Director of the Company
pursuant to the provisions of Section 257 (1) of the Companies Act, 1956.”
b-
For
Appointment of Mr. A as Managing Director:
“RESOLVED THAT
pursuant to provisions of section 269 read with Schedule XIII of the
Companies Act,1956 and subject to
provisions of Section 198, 309, 314 and other applicable provisions , if any,
of the companies Act, 1956, approval of the members of the Company be and is
hereby accorded to the appointment of Mr.
A, R/o
________________ as Managing Director of the Company for a period of 1
(one ) year with effect from 1st April,_________ and to the payment
of the following remuneration:-
a.)
Salary Basic - Rs.
_______________p.m.
b.)
Conveyance on actuals up to a limit of Rs. _______________p.m.
c.)
House Rent Rs.
_______________p.m.
RESOLVED FURTHER
THAT in the event of loss or inadequacy of profits during the tenure of service
of the Managing Director, the payment of salary, commission, perquisites and
other allowances shall be governed by the limits prescribed under Section II of
Part II of Schedule XIII to the Companies Act, 1956.”
4- Explanatory Statement (Forming Annexure
to Notice)
The Board, subject to the approval of
shareholders in the General Meeting, appointed Mr. A as Managing Director of
the Company effective 1st April _____________, for a period of one year on terms and conditions set
out in the Resolution. He is a partner of _______________, an associate concern
of the Company and Director in ________________ Ltd.
The remuneration as set out in the resolution
is in accordance with the provisions of Schedule XIII to the Companies act,
1956.
The Board recommends the resolution for
approval of Members.
None of the
Directors, except Mr. A is concerned or interested in the resolution.
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