The directors may appoint one of themselves as managing director. A managing director is “a director who, by virtue of an agreement with the company or of a resolution passed by the company in general meeting or by its Board, or, by virtue of its memorandum or articles of association is entrusted with substantial powers of management which would not otherwise be exercisable by him, and includes a director occupying the position of a managing director, by whatever name called.”
In the case of a public company and its subsidiary, amendment of any provision relating to the appointment or re-appointment of a managing director, whole-time director, or a director not liable to retirement by rotation will not be effective unless approved by the Central Government.
A new managing director must be appointed only with the approval of the Central Government. Reappointment also requires the sanction of the Central Government (except appointment under schedule XIII of Companies Act). A managing director cannot act as such for more than two companies and in the case of the second company, unanimous approval of the Board of Directors is necessary.
An un-discharged insolvent, one who has at any time been adjudged an insolvent, one who suspends or has suspended payment to his creditors, one who makes or has at any time made a composition with the creditors or one who has been, at any time, convicted of an offence involving moral turpitude, cannot be appointed as managing director of any company.
DUTIES OF THE MANAGING DIRECTOR: