Cheif Executive

Question 1

Chief Executive

Answer 1

A chief executive is an individual who, under the control and direction of the directors, is entrusted with the management of the company’s affairs. This includes directors or any other person occupying the position of a chief executive, regardless of the title or contract type.

A person who is ineligible to become a director cannot be appointed or continue as the chief executive of any company.

• Determination: The first chief executive is determined by the subscribers of the memorandum.
• Submission: Their details are submitted with the incorporation documents.
• Term: Holds office until the first Annual General Meeting (AGM) unless a shorter period is specified.
• Resignation/Removal: Can resign or be removed before the term ends.
• Government Nomination: The government can nominate the chief executive of a public sector company.

• Appointment Time Limit: Must be appointed within 14 days of the directors’ election or a casual vacancy.
• Term of Office: Appointed for a maximum of three years.
• Casual Vacancy: Holds office until the next election of directors.
• Re-appointment: The retiring chief executive can be re-appointed.
• Continuation: Continues to serve until a successor is appointed unless:
  
  • The office was expressly terminated.
  • The delay in appointing a successor is due to their fault.
• Government Nomination: The government can nominate the chief executive if the majority of directors are government-nominated.

First Chief Executive:
- Determination: The subscribers of ABC Ltd.’s memorandum decide on the first chief executive.
- Term: This chief executive serves until the first AGM unless a shorter period is set.

Subsequent Chief Executive:
- Appointment: After the first AGM, the board appoints a new chief executive within 14 days.
- Term: This chief executive serves for up to three years.
- Casual Vacancy: If the chief executive resigns, the board appoints a new one to serve until the next director election.

If you have any more questions or need further details, feel free to ask!

• Determination: The terms and conditions of the chief executive’s appointment are set by the directors or the company in a general meeting, according to the company’s articles.
• Government Nomination: If the chief executive is nominated by the government, the terms are determined by the government.

• Reports to Board: The chief executive reports to the board of directors and must operate within the authority granted by the board.

• Deemed Director: If the chief executive is not already a director, they are considered a director and have all the rights, privileges, and liabilities of a director.

The chief executive can be removed at any time through:
- Special Resolution: Passed in a general meeting of the company.
- Board Resolution: Supported by at least three-fourths of the directors.
- Government Authority: If the government holds more than 75% of the voting rights, it can remove the chief executive.

• Prohibition: The chief executive, their spouse, and minor children cannot engage in a business that competes with the company or its subsidiaries.

• Requirement: Upon appointment, the chief executive must disclose in writing any competing business interests to the company.

Terms of Appointment:
- Determination: The board of XYZ Ltd. sets the terms for their new chief executive, including salary and responsibilities.
- Reporting: The chief executive reports to the board and follows the authority given by them.
- Director Status: If the new chief executive is not already a director, they are now considered one with all associated rights and responsibilities.

Removal:
- Special Resolution: If the shareholders are unhappy with the chief executive, they can pass a special resolution in a general meeting to remove them.
- Board Resolution: If three-fourths of the directors agree, they can remove the chief executive.
- Government Authority: In a government-controlled company, the government can remove the chief executive if it holds the majority voting rights.

Competing Business:
- Prohibition: The chief executive of XYZ Ltd. cannot start a business that competes with XYZ Ltd. or its subsidiaries.
- Disclosure: Upon appointment, the chief executive must disclose any existing business interests that might compete with XYZ Ltd.

I hope this helps clarify the terms of appointment and related provisions for a chief executive! If you have any more questions or need further details, feel free to ask.