Vacation Of Office, Removal And Resignation Of Directors- Company Management & Remuneration
Vacation
Of Office, Removal And Resignation Of Directors
Vacation of office by directors (Sec.
283):
(1)
Statutory Vacation.
(2)Additional
grounds in case of private companies.
(3)
Acceptance of officer of profit.
Removal Of Directors
Directors
may be removed by:
(1) the
shareholders,
(2)the
Central Government,
(3)the
Company Law Board.
(1)Removal by Share holders:
In
certain circumstances, the shareholders may remove the directors.
(2)Removal by Central Government: (Secs.
388-B to 388-E):
The Central Government may, in
certain circumstances, remove managerial personnel from office on the
recommendation of the Company Law Board.
(3)Removal by Company Law Board (Sec.
402):
Where, on an application to the
Company Law Board for prevention of oppression (under Sec. 397) or
mismanagement (under Sec. 398).
Resignation Of Directors:
There is no provision in the
Companies Act, 1956 relating to the resignation of office of a director.
Overall maximum managerial remuneration:
The total managerial remuneration
to the managing / whole-time directors and / or manager of a public company or
a private company which is a subsidiary of a public company in respect of any
financial year must not exceed 11 per cent of the net profits of the company
for that financial year. The percentage aforesaid shall be exclusive of any
fees payable to directors for attending meetings of the Board of Directors or
any committee thereof.
Removal Of Directors
Directors
may be removed by
1. Shareholders (Sec.284)
The shareholders may, by passing
an ordinary resolution at their general meeting, remove a director before the
expiry of his period of office.
2. Central
Government (Secs.388-B to 388-E)
The Central Government may exercise this power where in its opinion
there are circumstances suggesting –
1. That the director concerned in
the conduct and management of the affairs of the company is or has been guilty
of fraud, misfeasance, persistent negligence or default in carrying out his
obligations and functions under the law, or breach of trust; or
2. That the business of the company
is not or has not been conducted and managed by the director in accordance with
sound business principles or prudent commercial practices; or
3. That the company is or has been
conducted and managed by the director in a manner which is likely to cause, or
has caused, serious injury or damage to the interest of the trade, industry or
business to which such company pertains; or
4. That the business of the company
is or has been conducted and managed by the director with intent to defraud its
creditors, members or any other person or against public interest. 3. Company
Law Board (Sec.402)
Where, on an application to the
Company Law Board for prevention of oppression or mis-management, the Company
Law Board finds that the relief ought to be granted, it may by an order provide
for the termination, setting aside or modification of any agreement between the
company and the director. When the appointment of a director is so terminated
or set aside he cannot sue the company for damages or compensation for loss of
office.
Tags : Business Environment and Law-Company Management & Remuneration
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