company law (CH #3) Flashcards
eligibilty criteria for directors?
natural person
a member of company
any other criteria specified by the articles
ineligiblity criteria for the directors?
following person cant be director of company:
a) Body corporate or company
b) a person not the member
c)a person with unsound mind
d) a minor
e) a person not holding NTN(commision may grant exception)
f) a person declared as undischarged insolvent by the court or he has filed application to be declared so.
g) a person convicted by the court for any immoral offence
h) a person declared by court that he lacks fiduciary behavior during last 5 years
i) person declared as insolvent by any provision of the act
what if undischarged inslovent is in directorship?
he would be imprisoned for 2 years or fine or both
further ineligibility criteria for listed companies ?
a) a person declared as bankrupt of financial institution by the court
b) a person who is or his spouse is broker or office/director in brokerage house
what is casual vacancy?
death
resignation
disqualification
casual vacancy of directors?
filled by director.
new director will hold office for remaing period of gone director
when casual vacancy filling is required by law?
1) of the listed company within 90 days of occurrence
2)when number of directors are less than the number required by law
Election of directors procedure?
1) Fixation of number of directors to be appointed at least 35 days before GM
2) sending notice of GM to members at least 1 days before GM
3)filling by members in writing to become the director to company at least 14 days before GM
4) All notices from members to become director shall be tranmiitted to all members within 7 days of GM
5) At GM poll for election of director shall be conducted
every member shall have votes equal to
number of his shares * number od directors to be appointed
power of court to declare election of director invalid :
court may declare election of all directors or any one of them in valid if
. member having 10 % voting power apply to court within 30 days of election providing that there has been material irregularity regarding the holding of elections
power of substantial acquire to hold fresh election of director
if a person gets required shareholding ( 100/number of directors %) to become a director he may apply company to hold fresh elections
with in 30 days of request company shall proceed to hold fresh elections
number of directors in proceeding shall not be reduced
listed company shall follow the procedures specified bty the directors
vacation of office by directors?
a director shall cease to hold office if:
he becomes subject to any ineligiblity criteria
he absent himself from three board meetings without leave
he or any firm in which he is partner or any a company in which he is a director
obtains loans or guarantee without fullfilling the conditions of act
accepts office of profit without approval of members( technical or legal adisor exception).
how a director can be removed ?
Directors have no power to remove director. Director can only be removed by passing resolution in general meeting through vote.
how a director can save from removal?
IF elected by members
a director will not be removed if he gets equal or more than votes against resolution obtained by the any director in last election
IF director appointed is 1st director ,casual vacancy , unopposed
he will not be removed if gets qual or more than votes calculated by formula
number of ordinary shatres of company* number of directors appointes at AGM/ number of directors for time being.
