Schedule XIII MD Appointment Resolution Template

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RESOLUTION FOR APPOINTMENT OF MANAGING DIRECTOR AFTER THE AMENDMENT OF SCHEDULE XIII OF THE COMPANIES ACT, 1956, W.E.F. 14 JULY, 1993 Format

Struggling to draft a compliant board resolution for appointing a Managing Director in your Indian company after the pivotal 1993 amendment to Schedule XIII? Our ready-to-use RESOLUTION FOR APPOINTMENT OF MANAGING DIRECTOR AFTER THE AMENDMENT OF SCHEDULE XIII OF THE COMPANIES ACT, 1956, W.E.F. 14 JULY, 1993 Format simplifies the process. Download this legal template in PDF or Word format for free and ensure seamless regulatory compliance.

What is the RESOLUTION FOR APPOINTMENT OF MANAGING DIRECTOR AFTER THE AMENDMENT OF SCHEDULE XIII?

This board resolution is a crucial corporate document used by Indian companies under the Companies Act, 1956, specifically post the amendment to Schedule XIII effective from 14 July 1993. The amendment removed the requirement for Central Government approval for appointing managerial personnel like Managing Directors in many cases, provided remuneration and other terms align with the revised Schedule XIII. This format provides a standardized, legally sound template for passing such a resolution at a Board meeting, making it indispensable for companies transitioning to the new regime.

It serves as official minutes recording the Board's decision to appoint a Managing Director, outlining terms of appointment, remuneration, and compliance affirmations. Whether you're a private limited company or a public company, this resolution ensures your appointment process is transparent, documented, and adheres to statutory mandates.

Why is This Resolution Format Important?

Post the 1993 amendment, Schedule XIII empowered Boards to appoint Managing Directors without prior government nod if conditions like age limits (25-70 years), tenure (up to 5 years), and remuneration caps (based on profits) are met. Failing to use a proper resolution can lead to invalid appointments, regulatory penalties under the Companies Act, or disputes among shareholders.

Key benefits include:

Regulatory Compliance: Aligns perfectly with post-amendment provisions, reducing approval delays.
Professional Documentation: Provides a clear audit trail for MCA filings, AGMs, and statutory returns.
Risk Mitigation: Protects against legal challenges by including necessary disclosures and approvals.
Efficiency: Ready-to-use format saves time for company secretaries and directors.

Ideal for businesses in India navigating corporate governance under the 1956 Act.

Key Elements of the Managing Director Appointment Resolution Format

Our customizable RESOLUTION FOR APPOINTMENT OF MANAGING DIRECTOR AFTER THE AMENDMENT OF SCHEDULE XIII OF THE COMPANIES ACT, 1956, W.E.F. 14 JULY, 1993 Format includes all essential sections:

Preamble: Meeting details, quorum, and attendance.
Recitals: Reference to the vacancy, candidate's qualifications, and Schedule XIII compliance.
Appointment Clause: Name, designation, term (e.g., 5 years), duties, and powers.
Remuneration Details: As per Part II of Schedule XIII, including salary, perks, commission.
Compliance Affirmation: No defaults, age eligibility, and no government approval needed.
Resolution Text: Unanimous approval and authorization for execution.
Closing: Date, signatures, and annexures if any.

This structure ensures completeness for filing with the Registrar of Companies (ROC).

Who Should Use This Resolution Sample?

Private and Public Companies in India: Especially those appointing first-time MDs or re-appointing post-1993.
Startups and SMEs: Scaling up management without legal hurdles.
Company Secretaries and Directors: For board meetings and compliance checklists. Common use cases: Expansion phases, succession planning, or restructuring under Companies Act, 1956.

Download Your Free Customizable Template Today!

Get instant access to this professional RESOLUTION FOR APPOINTMENT OF MANAGING DIRECTOR AFTER THE AMENDMENT OF SCHEDULE XIII Format in editable Word or print-ready PDF. Customize it effortlessly with our AI tools or seek legal help for specifics. Perfect for quick board meeting preparations.

Important Note

While this legal template is designed for convenience and compliance in India, it's recommended to consult a company lawyer or chartered accountant to tailor it to your company's Memorandum and Articles of Association. Not legal advice. Explore related formats like Director Appointment Resolutions, Shareholder Agreements, or other Companies Act templates for comprehensive corporate documentation.

RESOLUTION FOR APPOINTMENT OF MANAGING DIRECTOR AFTER THE AMENDMENT OF SCHEDULE XIII OF THE COMPANIES ACT, 1956, W.E.F. 14 JULY, 1993

Non-Judicial

RESOLUTION FOR APPOINTMENT OF MANAGING DIRECTOR AFTER THE AMENDMENT OF SCHEDULE XIII OF THE COMPANIES ACT, 1956, W.E.F. 14 JULY, 1993

RESOLVED that subject to the provisions of section 269 read with Schedule XIII and any other applicable provisions of the Companies Act, 1956 and pursuant to Article No. .........of the Articles of Association of the company and further subject to the approvals of the financial institutions, banks, etc. with whom the company has any borrowing arrangements and where, under Such arrangements their approvals are necessary, Shri????.................. be and is hereby appointed as the managing director of the company for a period of 5 (five) years commencing on and from???? upon such terms and conditions as are expressed and contained in the draft agreement between the company and the said Shri . ????placed on the table and signed by the Chairman for this item on the Agenda, for the purpose of identification, which draft be and is also hereby approved.

AND FURTHER RESOLVED that subject to the approvals of the members in a general meeting under sections 198, 309 and of the Central Government under section 269 of the Companies Act, 1956 and any other applicable provisions and also the Article ........of the Articles of Association of the company and also further of the financial institutions, banks, etc. with whom the company has any borrowing arrangements and where, under such arrangements their approvals are necessary, the said Shri????...................be paid the following remuneration for his services as the managing director of the company with effect from ????viz

Salary

A salary of Rs. 50,000 (Rupees Fifty Thousand Only) per month.

Perquisites

In addition to the above, the managing director shall be entitled to the following perquisites restricted to an amount equal to the annual salary or Rs ....... per annum, whichever is less. Unless the context otherwise requires, perquisites are classified into three categories'A', 'B'and 'C'as follows.

Category 'A'

This will comprise house rent allowance, leave travel concession, medical reimbursement, fees on clubs and personal accident insurance. These will be provided for as under:

(i) Housing I: The expenditure by the company on hiring furnished accommodation for the managing director will be subject to the following ceiling:

Sixty per cent of the salary, over and above ten per cent payable by the managing director.

Housing II: In case the accommodation is owned by the company, ten per cent of the salary of the managing director shall be deducted by the company.

Housing III : In case no accommodation is provided by the company, the managing director shall be entitled to house rent allowance subject to the ceiling laid down in Housing 1.

Explanation.-The expenditure incurred by the company on gas, electricity, water and furnishings shall be valued as per the Income-tax Rules, 1962. This shall, however, be subject to a ceiling of ten per cent of the salary of the managing director.

(ii) Medical reimbursement.-Expenses incurred for the managing director and the family subject to a ceiling of one month's salary in a year or three months' salary over a period of three years.

(iii) Leave Travel Concession.-For the managing director and his family once in a year incurred in accordance with 0 any rules specified by the company.

(iv) Club Fees.-Fees of clubs subject to a maximum of two clubs. This will not include admission and life membership fee.

(v) Personal Accident Insurance.-Premium not to exceed Rs. 4,000 per annum.

Explanation.-For the purpose of category W, 'family' means the spouse, the dependent children and dependent parents of the managing director.

Category 'B'

1 . Contribution to provident fund, superannuation fund or annuity fund will not be included in the computation of the ceiling on perquisites to the extent these either singly or put together are not taxable under the Income-tax Act. Gratuity payable will not exceed half a month's salary for each completed year of service.

2. Encashment of leave at the end of the tenure will not be included in the computation of the ceiling on perquisites.

Category 'C'

Provision of car for use on company's business and telephone at residence will not be considered as perquisites. Personal long distance calls on telephone and use of car for private purpose shall be billed by the company to the managing director.

Commission

Remuneration by way of commission will also be allowed in addition to salary and perquisites. The amount of it, based on the net profits of the company in a particular year, shall be subject to the overall ceilings laid down in section 198 and section 309.

Notwithstanding anything herein, where, in any financial year, during the currency of tenure of the managing director the company has no profits or its profits are inadequate, the company will pay him remuneration by way of salary and perquisites specified above.

AND FURTHER RESOLVED that after having obtained all the necessary approvals and after having incorporated in the draft agreement with the managing director, all such modifications, alterations, deletions, etc. as may be laid down by the shareholders, financial institutions, banks, etc. and if acceptable to Shri????the finalised draft of the agreement be engrossed on requisite stamp paper(s) and the common seal of the company be affixed to such stamped engrossment(s) of the agreement in the presence of any one of the directors of the company and that the director in whose presence the common seal shall be so affixed thereto do sign and execute the agreement for and on behalf of the company and that Shri...????Company Secretary

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Important Guidelines

Guidelines for Drafting Resolution for Appointment of Managing Director after the Amendment of Schedule XIII of the Companies Act, 1956 (w.e.f. 14 July 1993):

The Resolution for Appointment of Managing Director is a vital document used during board meetings to appoint or reappoint a Managing Director in compliance with the Companies Act, 1956, specifically after the amendment of Schedule XIII. Follow these guidelines for effective drafting:

Adherence to Schedule XIII: Clearly reference the amended Schedule XIII of the Companies Act, 1956, which governs the appointment and remuneration of managerial personnel, including Managing Directors.

Explicit Appointment Terms: Clearly state the terms of the appointment, including the tenure, remuneration, and any additional benefits. Ensure compliance with the statutory limits specified in Schedule XIII.

Legal Compliance: Adhere to all legal requirements and regulations related to the appointment of a Managing Director. Ensure that the resolution aligns with the provisions of the Companies Act and other relevant laws.

Approval of Shareholders: If required, specify that the appointment is subject to the approval of shareholders, especially if it exceeds the prescribed limits or if there are specific provisions in the company's articles of association.

Common Mistakes to Avoid:

Vague Appointment Terms: Avoid ambiguity in the resolution. Clearly define the terms of the appointment to prevent misunderstandings and legal issues.

Non-Compliance with Schedule XIII: Ensure strict compliance with the amended Schedule XIII to avoid regulatory complications and legal challenges.

Failure to Obtain Shareholder Approval: If needed, clearly state the intention to seek shareholder approval. Failure to do so may render the appointment invalid.

Inadequate Disclosure: Provide comprehensive information about the Managing Director's qualifications, experience, and any potential conflicts of interest to enhance transparency.

By following these guidelines and avoiding common mistakes, companies can draft a robust Resolution for the Appointment of Managing Director, ensuring legal compliance and transparent governance.

Frequently asked questions

What is the purpose of the Resolution for Appointment of Managing Director after the amendment of Schedule XIII of the Companies Act, 1956?→

This board resolution facilitates the appointment of a Managing Director in Indian companies, complying with Schedule XIII amendments effective 14 July 1993, detailing terms like tenure, remuneration, and responsibilities.

Is this resolution format still legally valid in India under the Companies Act, 2013?→

Originally for Companies Act 1956, it may require updates per Schedule V of Companies Act 2013. Verify with a legal expert for current Indian company law compliance.

Does this resolution require stamp duty or court fees in India?→

Board resolutions typically do not require stamp duty in most Indian states, but confirm state-specific stamp laws; no court fees apply unless filed with ROC.

In what format can I download this Managing Director appointment resolution?→

Download this legal agreement template in editable Word and PDF formats, optimized for Indian businesses.

Can I customize or edit this resolution template?→

Yes, this customizable template allows editing of clauses for company-specific details like MD name, salary, and tenure while maintaining legal structure for India.

Who should use this Resolution for Appointing Managing Director and when?→

Board of Directors of Indian companies should use it during meetings to appoint MD post-1993 Schedule XIII amendment; ideal for legacy compliance or transitional setups.