With reference to the provisions of the Companies Act, 1956

examine the validity of the following:

D, who is a director already in 19 public limited companies, accepts the directorships of the following companies:

(i) BC Private Limited, which is the holding company of a public limited company. (ii) RM Company which is an unlimited company.

(iii) MJ & Company Ltd. as an alternate director. [November, 19971

16. Mr. Ram was appointed as Managing Director of Prudential Company Limited in accordance with Schedule xm for a period of 5 years with effect from

1^st January, 1996 on a monthly remuneration of Rs. 30,000. The Board of Directors of the company propose to increase the remuneration of the

Managing Director to Rs. 40,000 per month with effect from 1^st January, 1998. Advise the Board of Directors about the legal requirements under the

Companies Act, 1956 to give effect to the proposal. State whether the increased remuneration can be paid as minimum remuner

or inadequacy of profit. [November, 19971

17. Mr. X is named as a director for life in the Articles of Association of Mis XYZ Private Limited which was incorporated on 1^st April, 1977. The Articles of

Association of the company also provide that he cannot be removed by the members in general meeting. Some of the members want to remove ‘X’ by

passing an ordinary resolution in general meeting. State with reference to the relevant provisions of the Companies Act, 1956 whether the proposed action

is valid. [November, 19971

18. A private company which has become a deemed public company seeks your advice on the following matters:

(i) Maximum remuneration that can be paid to a director who is neither in the wholetime employment of the company nor a managing director and the

minimum remuneration that can be paid to such a director in the event of loss in any financial year.

(ii) Payment of sitting fees to directors at Rs. 3,000 per board meeting as per

the Articles of Association. [May, 19961