Section 196 Appointment of managing director, whole-time director or manager

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, wholetime director or manager for a term exceeding five years at a time. It is further provided that no re-appointment shall be made earlier than one year before the expiry of his term.


No company shall appoint or continue the employment of any person as managing director, whole-time director or manager who —

(a) is below the age of twenty-one years or has attained the age of seventy years:

Provided that appointment of a person who has attained the age of seventy years may be made by passing a special resolution in which case the explanatory statement annexed to the notice for such motion shall indicate the justification for appointing such person;

Provided further that where no such special resolution is passed but votes cast in favour of the motion exceed the votes, if any, cast against the motion and the Central Government is satisfied, on an application made by the Board, that such appointment is most beneficial to the company, the appointment of the person who has attained the age of seventy years may be made.

(b) is an undischarged insolvent or has at any time been adjudged as an insolvent;

(c) has at any time suspended payment to his creditors or makes, or has at any time made, a composition with them; or

(d) has at any time been convicted by a court of an offence and sentenced for a period of more than six months.

(e) others ( Schedule V )

(1) he had not been sentenced to imprisonment for any period, or to a fine exceeding one thousand rupees, for the conviction of an offence under 19 Acts as specified under Part I of Schedule V.

(2) he had not been detained for any period under the Conservation of Foreign Exchange and Prevention of Smuggling Activities Act, 1974 (COFEPOSA).
However, where the Central Government has given its approval to the appointment of a person convicted or detained under para (1) or para (2), as the case may be, no further approval of the Central Government shall be
necessary for the subsequent appointment of that person if he had not been so
convicted or detained subsequent to such approval

(3) he has completed the age of twenty-one years and has not attained the age of seventy years.

(4) he is a resident of India

Provided that a notice convening Board or general meeting for considering such appointment shall include the terms and conditions of such appointment remuneration payable and such other matters including interest, of a  director or directors in such appointments if any:

Provided further that a return in the prescribed form shall be filed within sixty days of such appointment with the Registrar.

Subject to the provisions of this Act, where an appointment of a managing director, whole-time director or manager is not approved by the company at a general meeting, any act done by him before such approval shall be deemed to be valid


Priyansh Minocha

Priyansh Minocha is C.E.O and Director at Amonest India Private Limited and Founder at Casolutionsglobal

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