Stepwise Procedure For Appointment of Managing Director

Procedure-Appointment-Managing-Director

As per Section 2(54) managing director means a director who, by virtue of the articles of a company or an agreement with the company or a resolution passed in its general meeting, or by its Board of Directors, is entrusted with substantial powers of management of the affairs of the company and includes a director occupying the position of managing director, by whatever name called.

As per the provisions of Section 196(4) of Companies Act, 2013 Subject to the provisions of section 197 and Schedule V, a managing director, whole-time director or manager shall be appointed and the terms and conditions of such appointment and remuneration payable be approved by the Board of Directors at a meeting which shall be subject to approval by a resolution at the next general meeting of the company and by the Central Government in case such appointment is at variance to the conditions specified in that Schedule, Provided that a notice convening Board or General Meeting for considering such appointment shall include the terms and conditions of such appointment, remuneration payable and such other matters including interest, of a director or directors in such appointments, if any:

: Stepwise Procedure For Appointment of Managing Director :

Step 1: 

Approval of the Board

Hold a board meeting to
1.    Get the approval of board for appointment of Managing Director.
2.   Approve the terms and conditions on which the Managing Director is proposed to be appointed
3.   Fix the date, time, and venue of the General Meeting to get the shareholder’s approval by way of ordinary/special resolution.
Step 2 :
Filling of DIR-12, MGT-14 and MR-1

After passing Board Resolution following forms required to be filed with ROC

1.   DIR-12 within 30 days from the date of passing board resolution.
2.   MGT-14 within 30 days from the date of passing board resolution.
3.   MR-1 within 60 days from the date of passing board resolution.
Step 3 : 
Call General Meeting

Issue notice of General Meeting. The notice must be given at least 21 clear days before AGM. If the notice is to be sent by post two days excluded and the date of AGM and date of posting are also required to be excluded while calculating these 21 days.

Step 4 : 

Approval of Shareholders


Hold General Meeting to pass the necessary Ordinary/Special Resolution for appointment of Managing Director.
Step 5 : 
Filing of Special Resolution with ROC in MGT-14
      
The special resolution passed at the General Meeting needs to be filed with the Registrar in Form MGT-14 within 30 days of passing the special resolution.  

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