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One of our company needs to re-appoint Managing Director we had given his tenuers as 3 years from the date of appointment. Presently he is 68 years, my query is whether his re-appointment needs central government approval?

Board of Directors

Posted By: Nava bharat ventures limited 9 year(s) ago

This question has been closed if you want to answer,you have to re-open.


    D.HANUMANTA RAJU & CO

Re-appointment of Managing Director in this case does not require Central Government permission. Central Government permission is required when there is a variation in terms of contract. As per Section 196(3)(a), no company shall appoint or continue the employment of any person as Managing Director who is below age of 21 years or as attained age of 70 years. Provided that appointment of person who has attained age of 70 years will be made by passing a special resolution in which case a explanatory statement annexed to the notice for such motion shall indicate the justification for appointment of such person. But in this case he is only 68 years and has not attained the age of 70 years at the time of re-appointment. Therefore, no special resolution is required from shareholders. Therefore re-appointment of Managing Director who is 68 years old for a period of 3 years requires neither Central Government permission nor special resolution from shareholders. However, for Good Corporate Governance, it is suggested to pass special resolution for re-appointment and Central Government approval is not required.

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Expert    Ankit Singhi

Since at the time of appointment he is less than 70 years, no CG approval is required.

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