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MCQ Self Challenge #0093 Appointment as Director under Companies Act

Appointment as Director under Companies Act

 

Dear Professional Seniors & Friends,
Warm Greeting!

Here is the Next post of #MCQ on concept based practical professional knowledge on Appointment as Director under Companies Act in a unique manner to be self answered by participants. The detailed answer of these MCQs shall be posted next day for the self assessment of the participants.

MCQ 93.1: Mr. Ram has been appointed as the director in X ltd. due to his holding of an office as a managing director in its holding company, ABC Ltd. Can Ram hold office in X ltd and ABC Ltd as per Companies Act?

A. Yes, he can hold office in X ltd & ABC Ltd.
B. Yes, he can hold office in X ltd after ceasing office in ABC Ltd
C. He can hold office in ABC Ltd only.
D. None of the Above.

MCQ 93.2: In due course of time Mr. Ram was offered by HXL Ltd to join the company as a managerial personnel at a very good package . He was offered the package on the term that he has to resign from his current post. Mr. Ram served a notice in writing to the company on mail and through post to its registered office on 1.02.2018. His notice of resignation specified the date 15.02.2018 as the last date in ABC Ltd. On which date, can he accept appointment in HXL Ltd.?

A. 1.02.2018.
B. 15.02.2018.
C. Cannot accept appointment at all.
D. None of the Above.

Sincere Regards!

CA Sanjay Kumar Agrawal
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Answer MCQ Self Challenge #0093

 

Dear Professional Seniors & Friends,

Warm Greetings!

 

This post of MCQ is on provisions relating to Appointment as Director under Companies Act

 

Answer MCQ 93.1: C) He can hold office in ABC Ltd only

Answer MCQ 93.2: B) 15.02.2018

 

Practical Analysis for MCQ 93.1:

 

  • According to Section 167(1)h of the companies Act 2013, the office of a director shall become vacant in case he, having been appointed as a director by virtue of his holding any office or any employment in the holding ,subsidiary or associate company. If a person functions as a director even when he knows that the office of director held by him has become vacant on account of any of the disqualifications specified in subsection (1), he shall be punishable with imprisonment for a term which shall be extendable upto one year or with a fine which shall not be less than Rs 100000 but which may extend to Rs5,00,000  or both Section 167(2).
  • Holding of Directorship of Mr Ram in X Ltd is invalid in light of section 161(h) of the companies Act 2013. As per facts Mr Ram was appointed as the Director in X ltd due to the holding of office in Holding Company. According to the above provisions, office of director in X Ltd shall become vacant due to holding office in ABC Ltd. So holding of directorship in Xltd by Ram is invalid and he is liable to vacate.
  • Even if Mr Ram functions as a director knowing that the office of director held by him has become vacant on account of the above provision, he shall be punishable with for a term which may extend to one year and fine up to 5,00,000 or both.

On the Basis of above Analysis correct Answer to MCQ-93.1 C). He can hold office in ABC Ltd only

 

Practical Analysis for MCQ 93.2:

 

  • As per Section 168 of the Companies Act ,2013 director shall resign from the office by giving a notice in writing to the company. Board shall on Receipt of notice take note of the same and intimate the registrar Board shall place the fact of such resignation in the report of director in the immediate following General meeting by the company. Besides Director also forward his resignation to the registrar within 30 days of his resignation.
  • According to Section 168 of the companies Act ,2013 Resignation shall effect from the date on which the notice is received by the company or the date, if any specified by the director in the notice, whichever is later, i.e. 15.02.2018.
  • As per section 172 of the Companies act, 2013, if any company contravenes in compliances to the said provision, the company and every officer of the company who is in the default shall be punishable with the fine which shall not be less than fifty thousand rupees but which may extend to five lakh rupees.

 

On the Basis of above Analysis correct Answer to MCQ 93.2: B) 15.02.2018

 

(Disclaimer: The objective of the MCQ post is just to discuss the concept, it may happen, by change of facts, the answer may be different. Please do not treat this as professional opinion; you can definitely have your own opinion.)

 

Sincere Regards!

 

CA Sanjay Kumar Agrawal

Mobile: 9810116321

 

To access MCQ posts regularly, please Join Telegram Channel:
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