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Vacation Of Office, Removal And Resignation Of Directors- Company Management & Remuneration

   Posted On :  14.05.2018 10:05 pm

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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