From: BIPIN ACHARYA <bipinsacharya@gmail.com>
Date: Fri, Jan 13, 2012 at 11:21 AM
Subject: [CharteredSecretaries] Re: [CS_yahoogroups) Query regarding Section 266A of Companies Act-Allotment of DIN
To: company_secretary@yahoogroups.com, cs <charteredsecretaries@yahoogroups.co.in>
Date: Fri, Jan 13, 2012 at 11:21 AM
Subject: [CharteredSecretaries] Re: [CS_yahoogroups) Query regarding Section 266A of Companies Act-Allotment of DIN
To: company_secretary@yahoogroups.com, cs <charteredsecretaries@yahoogroups.co.in>
Dear friends,
What is the date of appointment of a director?
The date of Board-Meeting at which he is appointed ?
The date from which his appointment becomes effective?
In the given case, the Board has met on 12-12-2011 and appointed a director who acquired DIN subsequently on 3-1-2012.
There can be two situations.
[1] The Board appointed him on 12-12-2011, a simpliciter. The appointee had no DIN. This is in violation of section 253, the proviso to which lays down that no company shall appoint any individual as director of the company unless he has been allotted DIN.Such an appointment is illegal.
[2] Under another situation, the Board met on 12-12-2011 and appointed the individual as its director with effect from the date when he acquires DIN. The appointee acquired DIN on 3-1-2012 and his appointment as director became effective from 3-1-2012 in terms of the Board Resolution of 12-12-2011.The requirement under the Proviso to section 253 is fulfilled on 3-1-2012 from which the appointment as director, in the given case, has become effective.......Is such an appointment illegal?Is there any prohibition appointing a director with a prospective, future date? [ Have we not come across Managing /Whole-time Directors being appointed/re-appointed at Board Meetings with future/prospective dates/s of appointment/re-appointment?] Is there any prohibition against the Board appointing an individual as director effective from the date when he fulfills the legal requirement of acquiring DIN?
Noticeably, the second Proviso to section 266A allows an individual, not having DIN, to be appointed as director and also allows that appointee to hold the office as director till such time such applicant has been allotted DIN. This Proviso to section 266A subsists even after the insertion of the Proviso to section 253.
In the given case, there is no effective appointment on 12-12-2011. The individual does not hold the office of director on and from 12-12-2011. His appointment as director becomes effective on and from 3-1-2012 upon his acquiring DIN. The appointee does not hold the office of director between 12-12-2011 and 3-1-2012. His appointment as director becomes effective only upon his acquiring DIN and neither earlier nor otherwise.
In my considered view, in absence of any specific prohibition in the Companies Act, 1956 against a director being appointed with effect from a prospective/future date, there is no legal impediment upon the Board of Directors of a company in appointing an individual as a director subject to the condition that his appointment as a director shall become effective upon his acquiring DIN on a future date.
Incidentally, under MCA21 System, presently, the software does not check the date of appointment of a director with the date when the appointee acquired DIN.
Members may share their views and work-experiences in the above matters,please.
charms,
bipin
What is the date of appointment of a director?
The date of Board-Meeting at which he is appointed ?
The date from which his appointment becomes effective?
In the given case, the Board has met on 12-12-2011 and appointed a director who acquired DIN subsequently on 3-1-2012.
There can be two situations.
[1] The Board appointed him on 12-12-2011, a simpliciter. The appointee had no DIN. This is in violation of section 253, the proviso to which lays down that no company shall appoint any individual as director of the company unless he has been allotted DIN.Such an appointment is illegal.
[2] Under another situation, the Board met on 12-12-2011 and appointed the individual as its director with effect from the date when he acquires DIN. The appointee acquired DIN on 3-1-2012 and his appointment as director became effective from 3-1-2012 in terms of the Board Resolution of 12-12-2011.The requirement under the Proviso to section 253 is fulfilled on 3-1-2012 from which the appointment as director, in the given case, has become effective.......Is such an appointment illegal?Is there any prohibition appointing a director with a prospective, future date? [ Have we not come across Managing /Whole-time Directors being appointed/re-appointed at Board Meetings with future/prospective dates/s of appointment/re-appointment?] Is there any prohibition against the Board appointing an individual as director effective from the date when he fulfills the legal requirement of acquiring DIN?
Noticeably, the second Proviso to section 266A allows an individual, not having DIN, to be appointed as director and also allows that appointee to hold the office as director till such time such applicant has been allotted DIN. This Proviso to section 266A subsists even after the insertion of the Proviso to section 253.
In the given case, there is no effective appointment on 12-12-2011. The individual does not hold the office of director on and from 12-12-2011. His appointment as director becomes effective on and from 3-1-2012 upon his acquiring DIN. The appointee does not hold the office of director between 12-12-2011 and 3-1-2012. His appointment as director becomes effective only upon his acquiring DIN and neither earlier nor otherwise.
In my considered view, in absence of any specific prohibition in the Companies Act, 1956 against a director being appointed with effect from a prospective/future date, there is no legal impediment upon the Board of Directors of a company in appointing an individual as a director subject to the condition that his appointment as a director shall become effective upon his acquiring DIN on a future date.
Incidentally, under MCA21 System, presently, the software does not check the date of appointment of a director with the date when the appointee acquired DIN.
Members may share their views and work-experiences in the above matters,please.
charms,
bipin
On Thu, Jan 12, 2012 at 7:15 PM, Rupal Gambhir <grupal2011@yahoo.in> wrote:
Dear Member,Yes the concerned person can be appointed as a Director with a previous date.Thanks,Rupal GambhirFrom: Anita Rawat <anita.rawat85@yahoo.in>
To: "company_secretary@yahoogroups.com" <company_secretary@ yahoogroups.com>
Sent: Wednesday, 11 January 2012 5:15 PM
Subject: [CS_yahoogroups) Query regarding Section 266A of Companies Act-Allotment of DINDear Learned Members,The Board of Directors of a Company have approved the appointed of a person "Mr. A" as Director of the Company w.e.f. 12.12.2011.Mr. A does not have a DIN and therefore Form DIN 1 for allotment of DIN was filed on 03.01.2012 and the approved DIN was generated on 03.01.2012.Is is possible that a person to whom DIN is allotted on 03.01.2012 be appointed as Director of the Company w.e.f. 12.12.2011(a date prior to the date of allotment of DIN)You are requested to give your valuable inputs.RegardsAnita RawatFor D.Verma & AssociatesCompany Seceretary
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