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Appointment of Whole Time Director - Urgent Please reply...

Postby hinahanda » Mon Apr 19, 2010 11:26 am

Dear all,

Does the appointment of an employee as a whole time director attracts section 314? Also, if an employee is appointed as director, does he looses his status of an employee and is totally governed by the schedule - XIII?

Can we appoint WTD in EGM?

REGARDS
HINA
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Re: Appointment of Whole Time Director - Urgent Please reply...

Postby murthy1951 » Mon Apr 19, 2010 11:36 am

Appointment of an employee in the wholetime employment of the company makes him a wholetime director. He does not lose the right as an employee. Section 314 is not applicable if a person gets employment as a director or to directorial remuneration. If apart from director he gets someting else then only section 314 applies. As for remuneration is concerned in a public company it is governed by schedule XIII. However, section 314 applies to all companies, private and public.
To answer in greater detail, there should be proper disclosure.
T.R. Ramamurthy
Ramamurthy Associates,
G-156/F-2, Dilshad Colony,
Delhi 110095
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Re: Appointment of Whole Time Director - Urgent Please reply...

Postby kaursarab8 » Mon Apr 19, 2010 11:50 am

Agreed wid Mr. Murthy. In addition, I would like to add one more thing that a person or employee who is to be appointed as WTD, is required to be appointed as Additional Director first. He may be appointed as WTD later in a board meeting. In addition to Form 32 for his appointement, you has to file Form 25C for giving remuneration
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Re: Appointment of Whole Time Director - Urgent Please reply...

Postby hinahanda » Mon Apr 19, 2010 11:56 am

Thank u all for ur reply.....But cant we appoint WTD directly in EGM as schedule - XIII requires appointment of WTD in the meeting of shareholders only.

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Re: Appointment of Whole Time Director - Urgent Please reply...

Postby murthy1951 » Mon Apr 19, 2010 7:45 pm

If you appoint a person in the EGM or AGM straightaway as director, his form 32 would go as a director in the first instance and thereafter, by another resolution, you make him a whole time director. However, if your articles permit a person to be appointed by the AGM / EGM directly, then you can take this route. Otherwise, the MCA system, if a director is appointed by Board, only lets him be made as additional director. This is because of wording in section 255(2). Though the systems insists making a person as an additional director and then make him a director in general meeting, it is otherwise to be considered as an aberration as seniors like Mr Bipin Acharya - have expressed a view that an act can not be controlled through system software. But be that as it may, you go by whatever is the current day system (efiling). My view is you make two separate resolutions, firstly for induction as a director and then next for appointment as WTD and file them separately. Pre-fill the forms and get verified.
T.R. Ramamurthy
Ramamurthy Associates,
G-156/F-2, Dilshad Colony,
Delhi 110095
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