Board Resolution - Appointment of MD / WTD at a remuneration in case of inadequate or no profit Authored by Dokmart

Section 196

No company shall appoint or employ at the same time a managing director and a manager.

No company shall appoint or re-appoint any person as its managing director, whole-time director or manager for a term exceeding five years at a time:

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

Section 197

The total managerial remuneration payable by a public company, to its directors, including managing director and whole-time director, and its manager in respect of any financial year shall not exceed eleven per cent. of the net profits of that company for that financial year computed in the manner laid down in section 198 except that the remuneration of the directors shall not be deducted from the gross profits:

Provided that the company in general meeting may, with the approval of the Central Government, authorise the payment of remuneration exceeding eleven per cent. of the net profits of the company, subject to the provisions of Schedule V:

Section 203

Every company belonging to such class or classes of companies as may be prescribed shall have the following whole-time key managerial personnel,—

(i) Managing Director, or Chief Executive Officer or Manager and in their absence, a whole-time director;

(ii) Company Secretary: and

(iii) Chief Financial Officer:

Rule 8

Every listed company and every other public company having a paid-up share capital of tencrore rupees or more shall have whole-time key managerial personnel.