. Mr. P, the managing director of MIs XYZLtd., is proposed to be appointed as managing director of MIs ABC Ltd. State the procedure of such an

Section 316 of the Companies Act, 1956 provides that a person who is the managing director of one company can be appointed as managing

director of another public company or a private subsidiary company by passing a resolution at the Board meeting considering the said proposal with the

consent of all the directors present and entitled to vote at the meeting provided the specific notice of the meeting and the resolution to be moved thereat

has been given to all directors then in India. In addition, it will require the approval of the Central Government under Section 269 because such appointment

will not satisfy condition (d) of Part 1 of Schedule XIII. Schedule XIII provides that a person may be appointed as a managing director or whole-time director

or manager of a company without the approval of the Central Government if certain conditions are satisfied including a condition [viz., condition (d)] that

tl1e person to be so appointed should not already be the Manager, Managing Director or whole-time Director of another company.

Procedure

1. Hold a Board meeting by giving specific notice of item of appointment and approve the apartment with the consent of all directors of the company

present and entitled to vote at that meeting and pass a resolution for the appointment.

2. Ensure that the provisions of Section 299 regarding disclosure of interest of directors, etc. are duly complied with. Interested directors are not entitled to

vote on the resolution.

3. A copy of the resolution of the Board or agreement executed by the company, relating to the appointment should also be filed alongwith Form No. 23

with the Registrar of Companies (Sec. 192).

4. As the appointment is not in accordance with the conditions specified in Schedule XIII to the Act, make an application to the Central Government in Form

25A of the Companies (Central Government) General Rules and Forms together with the prescribed fee.

5. Approval of the shareholders in general meeting will also have to be obtained. In case, the resolution passed is a special resolution, a copy thereof

along with Form No 23, shall be filed with the Registrar of Companies together with the filing fee within 30 days.