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Appointment Of Directors - Company Management & Remuneration
Business Environment and Law-Company Management & Remuneration
Appointment Of Directors - Company Management & Remuneration
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Appointment Of Directors - Company Management & Remuneration
Appointment Of Directors
a. The Articles of a company usually name the first directors by their respective names or prescribe the method of appointing them.
b. If the first directors are not named in the Articles, the number of directors and the name of the directors shall be determined in writing by the subscribers of the Memorandum or a majority of them (Clause 64 of Table A).
c. If the first directors are not appointed in the above manner, the subscribers of the Memorandum who are individuals become directors of the company.
Directors must be appointed by shareholders in general meeting. At least 2/3rds of the total number of directors shall be liable to retire by rotation. Such directors are called rotation directors.
Appointment of a new director (Sec. 257): (1) Fourteen days’ notice and deposit of Rs.500. (2) Consent in writing to act as director (Sec. 264). (3) Separate ordinary resolution for each appointment (Sec. 263).
Retirement of directors where annual general meeting is not held: A director who is to retire by rotation at the annual general meeting shall not continue in office after the last day on which the annual general meeting in each year should have been held.
The directors of a company may appoint directors: (1) As additional directors (Sec. 260), (2) In a casual vacancy (Sec. 262) and (3) As alternate director (Sec. 313).
The number of directors so appointed shall not exceed 1/3rd of the total number of directors, and they are not liable to retire by rotation.
The system of proportional representation ensures representation of the minority shareholders on the Board of Directors.
1. First Directors (Sec. 254 and Clause 64 of Table A)
a. The Articles of a company usually name the first directors by their respective names or prescribe the method of appointing them.
b. If the first directors are not named in the Articles, the number of directors and the name of the directors shall be determined in writing by the subscribers of the Memorandum or a majority of them (Clause 64 of Table A).
c. If the first directors are not appointed in the above manner, the subscribers of the Memorandum who are individuals become directors of the company.
2. Appointment of directors by the company (Secs. 255 to 257, 263 and 264)
Directors must be appointed by shareholders in general meeting. At least 2/3rds of the total number of directors shall be liable to retire by rotation. Such directors are called rotation directors.
Appointment of a new director (Sec. 257): (1) Fourteen days’ notice and deposit of Rs.500. (2) Consent in writing to act as director (Sec. 264). (3) Separate ordinary resolution for each appointment (Sec. 263).
Retirement of directors where annual general meeting is not held: A director who is to retire by rotation at the annual general meeting shall not continue in office after the last day on which the annual general meeting in each year should have been held.
3. Appointment of director by directors (Secs. 260, 262 and 313)
The directors of a company may appoint directors: (1) As additional directors (Sec. 260), (2) In a casual vacancy (Sec. 262) and (3) As alternate director (Sec. 313).
4. Appointment of directors by third parties:
The number of directors so appointed shall not exceed 1/3rd of the total number of directors, and they are not liable to retire by rotation.
5. Appointment by proportional representation (Sec. 265):
The system of proportional representation ensures representation of the minority shareholders on the Board of Directors.
6. Appointment of directors by the Central Government (Sec. 408):
Any director appointed by the Central Government shall not be required
to hold any qualification shares.
Tags : Business Environment and Law-Company Management & Remuneration
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