Question ID :
41077
sec 196 of companies act
A person was appointed as MD under companies act 1956 for life. Under section 196 of 2013 Act MD can be appointed only for 5 years. Will he continue to be MD or should he be again re-appointed for 5 years only
Posted by
t sankar
on
Jun 17, 2021
Filed Under
CORPORATE & OTHER LAWS
He cannot continue as MD. Maximum tenure of MD should be 5 years as per Companies Act 2013. He can be reappointed. But his reappointment cannot be made earlier than one year before expiry of his term.
Posted by
CA. chunauti dholakia on
Jun 17, 2021
Answer ID :
81159
@dholakia
sec.196 talks of about only appointment or re-appointment. Here MD is not being appointed or re-appointed. Here MD is only continuing as MD for life as per appointment under 1956 Act. Will sec 196 apply in case of continuing to be MD?
Posted by
t sankar on
Jun 18, 2021
Answer ID :
81161
Yes. It will for continuing as MD as well.
Posted by
CA. chunauti dholakia on
Jun 21, 2021
Answer ID :
81162
Section 196 applies to the cited issue. Inference :- MCA General Circular No. 32/2014.
Posted by
B.CHACKRAPANI WARRIER on
Jun 21, 2021