Gain Insight On Appointment As Director Under Companies Act

MCQ SELF CHALLENGE #0093 APPOINTMENT AS DIRECTOR UNDER COMPANIES ACT

Appointment as Director under Companies Act

Dear Professional Seniors & Friends, Warm Greetings!

This is the next WMCQ of top tax consultant in gurgaon, which asks participants to self-answer questions about concept-based practical professional knowledge on appointment as a director under the Companies Act in a novel way. The detailed answers to these MCQs will be posted the following day for the participants' self-assessment.

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 the Companies Act?

A. Yes, he can hold office in X & 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 H0Q 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 by mail and through post to its registered office on 1.02.2018, His notice of resignation specified the date 15.02.2015 as the last date in ABC Ltd. On which date, can he accept an appointment in HXL, Ltd.2

A 1.02.2018.

B. 15.02.2018.

C. Cannot accept an appointment at all

D. None of the Above.

Answer MCQ Self Challenge #0093

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

Answer MCQ 98.1:

C) He can hold office in ABC Ltd only

Practical Analysis for MCQ 93.1:

• According to Section 167(1)n 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 XLtd is invalid in light of section 161m) of the Companies Act 2013. As per tacts Mr Ram was appointed as the Director in XItd due to the holding of office in the Holding Company. According to the above provisions, the office of the director in X Ltd shall become vacant due to holding office in ABC Ltd. So holding of directorship in Xtd by Ram is invalid and he can 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 has been punishable with for a term which may extend to one year and fine up to 5,00,000 or both

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

Answer MCQ 93.2:

B) 15.02.2018

Practical Analysis for MCQ 93.2

• As per Section 168 of the Companies Act 2013 director shall resign from 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 immediately following General meeting by the company. Besides Director also forwarded 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 compliance with the said provision, the company and every officer of the company who is in default shall be punishable with a fine which shall not be less than fifty thousand rupees but which may extend to five lakh rupees.

On the basis of the above Analysis correct Answer to MCQ 93.2:8) 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 a professional opinion you can definitely have your own opinion.)

Sincere Regards!

CA Sanjay Kumar Agrawal

Mobile: 9810116321