CS Executive · Company Law and Practice · Directors
Arjun, a director of Zenith Infra Ltd, executes a document assigning his office to his nephew so that the nephew may attend Board meetings and act in his place. What is the legal effect?
The assignment is void. A director of a company cannot assign his office to another person, and any assignment made is void under the Companies Act, 2013. Board approval or the nephew being a shareholder does not make it valid.
- AValid, if the Board approves the assignment by a simple majority
- BValid, if the nephew is a shareholder of the company
- CValid for one year, after which it must be renewed
- DVoid, because a director cannot assign his office and any such assignment is voidCorrect
Explanation
The Act provides that a director of a company shall not assign his office, and any assignment so made is void. Board approval or the nephew's shareholding cannot validate it. A director may appoint an alternate director only under the conditions the Act and articles allow, which is a different mechanism.
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