Provisions Regarding Managing Directors
The following provisions are given in the Companies Act in relation to Managing Directors (1) Appointment of Managing Directors
Following are the provisions regarding the appointment of managing directors of the company.
(1) To obtain the permission of the Central Government for the appointment of the Managing Director.
(2) To obtain the approval of the Central Government on the change in the conditions of appointment and reappointment of the Managing Director in a public company.
(3) The Central Government may, on the advice of the Consultative Committee, order the appointment of a Managing Director.
(4) It is mandatory for every public company or a private company which is a subsidiary of a public company or deemed to be a public company to appoint a managing director or a whole time director, if its paid-up share capital is ₹ 5 crore.
(5) The Managing Director may be appointed by any of the following methods (i) by resolution in the general meeting of the company.
(ii) by arrangement entered into with the company.
(iii) By resolution of the Board of Directors.
(iv) Councilor by the provision of memorandum and article.
(II) Period of Managing Director
The Managing Director cannot be appointed for more than 5 years at a time and he will be re-appointed for 5 years 2 years before the expiry of the term of 5 years of the Managing Director.
May go. Generally one person can be the Managing Director of only one company. (III) Disqualifications of Managing Director: According to the Companies Act, the following persons cannot be appointed to the post of Managing Director
It has happened (1) a person who has been declared insolvent or an insolvent who has not been discharged (2) a person who has not paid or withheld or settled his creditors.
(3) A person who has been punished by a court of law for a moral offence. (4) A person who is less than 21 years of age or more than 70 years. (IV) Remuneration of Managing Director
The remuneration may be paid to the managing director in the form of monthly payment or as a specified percentage of the net profit or both, but such remuneration in the case of a managing director without the approval of the Central Government exceeds 5% on the net profit. And in case of more than one manager, the total remuneration of all the managing directors cannot exceed 10% of the net profit.
(V) Vacation from Office The circumstances described in section 283 are applicable to the directors and also to the managing directors.
Is. In the event of these circumstances, the Managing Director is relieved of his post. The Central Government can remove the Managing Director from his post if he is found guilty of certain charges, such as negligence, dereliction of duty, not carrying on business according to business policies, acting prejudicial to the interests of the company, defrauding members or creditors, etc. . (VI) Number of Managing Director and Companies
1. Only one company to be managing director- No public company and any private company which is a subsidiary of a public company may, after the commencement of this Act, appoint any person to be a managing director who Working as Managing Director in another company.
2. To be managing director of more than two companies with the permission of the Central Government.—The Central Government may permit any person to be appointed as the managing director of more than two companies, if it is necessary for the proper functioning of all the companies. Had only one Managing Director. (VII) Vacation of Managing Director
The Central Government has the right to entrust the investigation of cases against the managers to the High Court related to fraud, negligence and breach of duty and on the basis of the decision of this Court, the Central Government can remove any person (Managing Director) from his post. can remove.