‘X’ was appointed as Managing Director for life by the Articles of Association

of a private company incorporated on 1^st June, 1970. The Articles also

empowered ‘X’ to appoint a successor. ‘X’ appointed by will’ G’ to succeed him after his death. Answer the following:

(i) Can ‘G’ succeed ‘X’ as Managing Director after the death of ‘X’?

(ii) Is it possible for the company in general meeting to remove ‘X’ from his office of directorship during his life-time? [November, 19951

23. The Board of Directors of a public company in the private sector having made

an average net profit of Rs. 1 crore during the last 3 financial years propose to donate

during the current year the following amounts:

(i) Rs. 1,00,000 to a school run exclusively for the benefit of employees,

(ii) Rs. 40,000 to a general charitable fund, and

(iii) Rs. 4,00,000 to a political party.

Advise the Board of Directors about their powers in respect of the above explain

ing the relevant provisions of the Companies Act. [May, 1995]

24. State briefly the legal requirements to be complied with by a public company to give effect to the following proposals:

(i) Payment of Rs. 50,000 as minimum remuneration to the ordinary directors in a financial year when the company has suffered a loss. The directors

have been receiving remuneration by way of commission on net profits within the prescribed limits.

(ii) Payment of minimum remuneration to a wholetime director in a financial year when the company has suffered a loss. The appointment has been made

in accordance with the conditions specified in Schedule XIII to the Companies Act and he is being remunerated by way of commission on net profits.

(iii) Appointment of a person as Managing Director without remuneration in accordance with the conditions specified in Schedule XIII to the Companies