Who is whole time director

I would like to known what is the meaning of whole time director and what are the benefits as per company laws. Jagruti CS Expert Follow. Thus it means Director who is in employment or who devotes his whole time in the management of the Company business unlike non executive director who may renders expert services to the Company.

Whole time Director may get salary for his Service rendered if Board of Directors as well as by the Members approve the same. Regarding Shares, you are eligible if article provide for the qualification shares or under ESOS Sceheme if Company decides; otherwise there is no special right to WTD to get the shares of the Company.

While in the Company Board, you do not have any special right. Just its on you how you can convince your Board for decision and other management work. In other words he cannot be an employee of another co. But he can be ordinary director in other companies. An ordinary director attends the Board meeting and does not involve in the day to day activities of the Co.

But a WTD is a managerial level employee cum director. He draws salary for his work. For eg. In normal case the Board resolution appointing the WTD describes his functions or there will be a separate agreement. It is not clear your co. Because in public co. However, if there are any variances as to the conditions mentioned in Schedule V of the Companies Act, the appointment and remuneration payable to them has to be approved by resolution in the succeeding general meeting.

When the managing director vacates office as a director, it may lead to the discontinuation of office as a managing director.

This means that he can give is resignation as a managing director and still continue as a director of the company but vice versa is not possible. Your email address will not be published. Save my name, email, and website in this browser for the next time I comment. Key Differences Between Managing Director and Whole-time Director As we have understood the meaning of the two terms, let us understand the difference between managing director and whole-time director: A Managing Director is the one who represents the Board in day-to-day management.

On the other hand, a Whole-time Director is a director appointed under a special contract of employment as a full-time employee of the company. A managing director is an officer of the company who possesses substantial powers of management. As against, a whole-time director is an ordinary officer of the enterprise, who does not possess discretionary power to take policy decisions.

For the appointment of a managing director, the resolution is passed at the board meeting, and the approval of shareholders is not necessary. As against, for the appointment of whole-time director special resolution is passed at the AGM. A company either employs a managing director or manager, at one time, whereas a company can employ a manager and whole-time director, at the same time. One person can become a managing director in two companies.

As against, one can be in whole-time employment of the company in just one company at a time, so one cannot hold the position of whole-time director in more than one company. Leave a Reply Cancel reply Your email address will not be published. A managing director refers to the officer of the company who represents the Board in routine activities.

File e-form MGT for board resolution along with attachments with the Registrar of Companies regarding appointment or variation if any in terms of appointment of whole-time Director within thirty 30 days from passing of resolution.

Filling of E-form MR-1 within sixty 60 days. Convening and passing of ordinary resolution for appointment of whole-time. Sending of Appointment letter to whole-time Director and entry in register minutes, etc of company. Only three forms are required for appointment of whole-time Director and these are There are many times when a situation arises that a whole-time Director wants to resign from the company, whatever the reason maybe.

The company will take the required steps for such resignation. It should be noted that the resulting vacancy shall be filled-up by the Board at a meeting of the Board within a period of six months from the date of such vacancy. The remuneration of the whole-time director is required to be paid after complying with the provisions of section and schedule V of the Companies Act, and rules made thereunder.

The companies which are required to appoint whole-time Director should appoint them within time. And if Any company fails to appoint within time, such company shall be liable to a penalty of five lakh rupees and every director and key managerial personnel of the company who is in default shall be liable to a penalty of fifty thousand rupees and where the default is a continuing one, with a further penalty of one thousand rupees for each day after the first during which such default continues but not exceeding five lakh rupees.

Disclaimer : — The above article is prepared keeping in mind all the important and basic question as well as provision of section , and of the Companies Act, which comes in mind of a professional or other stakeholder while company appointing a Whole-Time Director. The author has tried to cover all the important and basic question.

Under no circumstance, the author shall not liable for any direct, indirect, special or incidental damage resulting from, arising out of or in connection with the use of the information. WT director is appointed by Shareholders and term as WT director will be determined by shareholders in AGM based on voluntary rotation for 3yrs or 5yrs etc..

Sir In point 7 you have mentioned twice about issuing letter of appointment and when DIR 12 is filed already where comes out the need for approval of shareholders, kindly clarify. Good article on whole time director except some grammatical errors. WT Director is an employee as per Companies Act But an employee normally is entitled to remain in service up to the age of 60 years i. What are the provisions of the Companies Act ? Your email address will not be published. Post Comment.

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