Act., when he is already holding position of a Managing Director in a Private

The Board of Directors of MI s ABC Motors Limited made the following appoint ments at its meeting held on 1^st January, 1994 :

(i) Mr. X, a Director of its subsidiary company, namely, MI s ABC Forgings Limited, was appointed as Purchase Manager on a consolidated salary of Rs. 11,000 per month with effect from 1^st January, 1994.

(ii) Mr. Y was appointed as the Sales Manager on a consolidated salary of Rs. 11,000 per month with effect from 1^st January, 1994. Answer the following explaining the relevant provisions of the Companies Act:

(i) Does the appointment of Mr. X require the approval of the members in a general meeting of any company? Will your answer be different ifMI s ABC Motors Limited is the subsidiary of MI s ABC Forgings Limited?

(ii) Mr. P, a relative of Mr. Y, was appointed as a Director of Mis ABC Motors Limited on 1^st January, 1995. Does it affect the continuation of Mr. Y as the Sales Manager? [May, 1995]

26. “While in general the Directors of a company cannot hold an office or place of profit, yet there are cases where it is so possible for a director to hold

such an office or place of profit.” Discuss. When shall a director’s office or place of profit be deemed to be an ‘office or place of profit’ under the

Companies Act, 1956? [November, 1994]

27. What are the rights and liabilities of the Directors for their ultra vires acts? Is it in order for a company to indemnify the Directors against all liabilities

that may be

incurred by him? [November,1994]

28. Explain the manner in which a Director is required to disclose his interest at a Board of Directors meeting. What consequences shall follow for

non-disclosure of interest by such a Director? In what cases is he not required to make a disclosure ofhis interest?

[May, 1994]