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CA Intermediate · Corporate and Other Laws · Management & Administration

Kaveri Pharma Ltd, a listed company, has 10 directors. Its board has appointed Mr. Rao as an additional director on 1 June. The articles are silent on the matter. Mr. Rao's position under the Companies Act, 2013 is that he:

An additional director appointed by the board holds office only until the next annual general meeting, or the last date by which that AGM should have been held, whichever is earlier. Continuing thereafter requires appointment by the members at the general meeting.

  1. AHolds office only up to the date of the next annual general meeting or the last date on which it should have been held, whichever is earlierCorrect
  2. BHolds office for a full term of five years from appointment
  3. CHolds office until the next board meeting confirms him
  4. DHolds office up to the next AGM, and may then continue automatically if no one objects

Explanation

An additional director appointed by the board holds office only up to the date of the next AGM or the last date on which the AGM should have been held, whichever is earlier. He is not entitled to a fixed term and does not continue automatically; members must appoint him at the general meeting. Hence the first option is correct.

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