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Monday, January 7, 2008

Copy of the Board resolution

concerned or interested in the variation, a memorandum clearly specifying the nature of the concern or interest of such other director must also be sent to every member.
Copy of the Board resolution must also be filed with the Registrar of Companies
The increased remuneration may be paid even if the company has no profits or its profits are inadequate (para 1, Section II, Part II of Schedule XIII).
(b) Removal of a Director. Section 284 provides that a company may, by ordinary resolution passed in general meeting after due receipt and service of a special notice, remove a director before the expiry of his term of office. Section 284 applies to both public as well as private companies. A private company can have permanent director or life directors. Even such a permanent or life director can be removed (except a permanent or life director having been in office on or before April 1, 1952).
Section 283 provides that the office of a director shall become vacant if he is removed in pursuance of Section 284. A private company which is not a subsidiary of a public company may, by its Articles, provide that the office of director. shall be vacated on any grounds in addition to those specified in Sections 283(1) and 283(3). The Articles cannot, therefore, provide that the director for life shall not be liable to be removed. A provision like that would run contrary to the provisions of Sections 283 and 284 and would, therefore, be hit by the provisions of Section 9 which specifies that the provisions of the Act have overriding effect on clauses in the Memorandum or Articles or any agreement, if they are not in conformity with the provisions of the Act.
In view of the above the proposed action of removal of X by passing an ordinary resolution in general meeting is valid, subject to compliance of the procedure laid down in Section 284.
P. 38.- M The Managing Director of Mis Speculative Builders Ltd. has resigned as the company was not doing well and also incurring losses. The Board of Directors have decided to appoint Mr. Reliable aged 71 years as the new Managing Director, because of his proven track record ot, nearly 50 years, turning sick companies into profitable ones. The only condition put forth by Mr. Reliable is that he should be paid the maximum permissible salary and perquisites as provided in the Companies Act without requiring the approval of Central Government. The effective capital of the company is Rs. 20 crores. Advise the company about (i) the procedure to be followed for the appointment of Mr. Reliable and (ii) the quantum of remuneration payable to him.
With a view to giving greater freedom to companies in regard to managerial remunration and appointment, Schedule XIII to the Companies Act was amended in 1996., a copany will have fullfreJ:.ctomtQ point a manageersoha? attained the age of 70 yearswIf11.out approval of the Central GOvernment, provided his appointment i,:; approved by special resolution. Thus, by passin speci,!!resolution in general meetingM,r=-Reliable can be appointed as Managmg Directw.
The appointment may be made without the approval of Centrl Goven(ment, if
such appointment is made in accordance with the conditions specified in Parts I & II
of Schedule XIII and a return in the prescribed Form No. 25 C is filed within 90 days from the date qf such appointment

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