Company Law

Appointment of managerial personnel: Applicable to all Cos including Private Cos

1.

Term

[S. 196(2)]

NOT > 5 years at a time

[Also refer ‘Remuneration by public companies having no/inadequate profits’]

2.

Re-appointment 
[Proviso to S. 196(2)]

NOT earlier than 1 year before the expiry of the term

3.

Age of the Appointee 
[S. 196(3)]
  • NOT < 21 years &
  • NOT > 70 years unless a special resolution is passed and the explanatory statement annexed to the notice for such motion indicates the justification for appointing such person.
  • Where no such Spl Reso is passed but votes cast in favour of the motion > the votes, if any, cast against the motion and the CG is satisfied, on an application made by BoD, that such appointment is most beneficial to the Co, the appointment of the person who has attained the age of 70 years may be made.

4.

Terms and Conditions for Appointment of managerial personnel without approval of CG (i.e., Eligibility)

As per S. 196(3) read with Sch. V, Part I

5.

Board/General Meeting Approvals

[S. 196(4)]
  • Terms including remuneration should be approved by BoD, subject to approval by a resolution at the next GM
  • Notice convening the relevant meeting should include terms and conditions of such appointment, remuneration payable and such other matters including interest of directors

6.

Return of Appointment 
[2nd Proviso to S. 196(4)]
  • In Form MR 1 to be filed within 60 days of appointment