APPOINTMENT OF DIRECTORS - SECTION 274 HIGHLIGHTS 1 Procedure for removal 2 Director who cannot be removed 3 Special notice requirement

4 Reason for removal not required 5 Articles cannot prohibit removal Details 1 Procedure for removal a Notice for removal - by member of company b Special notice must be given in 14 days before GM c Company forward the copy to director concerned d Director has right to make his representation against removal e If representation is deflamatory - as per CLB Yes - no need to circulate the same and he can not readout the same in GM, director have to pay the cost Application to CLB can be made by the company or any aggrieved person f Representation by director - sent to member at least 7 days before GM g If representation not sent the same shall be readout at GM h GM shall be held, director has a right to be heard at the meeting Oral represetation can be made in addition to written one by the directior. It is i the right of the director. j Director removed if OR is passed Any person can be appointed as director in his place, but a special notice has k to be given to the company 2 a b c d Director who cannot be removed Nominee director appointed u/s 408 Director appointed u/s 265 - Proportional representation Nominee director appointed by FI constituted under special act of parliament Director of private company holding office for life as on 1.4.1952. Hence permanent director of private company can be removed u/s 284, if he has been appointed after 1.4.1952

3 Special notice requirement Special notice need not comply with provisions of sec 188. Therefore even a member holding one share can give notice u/s 284 4 Reason for removal not required Member proposing removal is not bound to give explanatory statement for removal and it is the duty of the board to give the same Hence member cannot be compelled to disclose the reason for removal - LIC vs ESCORTS LTD

5 Articles cannot prohibit removal Articles cannot restrict the shareholder his right to remove the director u/s 284

COMMENTS 2 special notice in this section and it is very interesting to note the same Special notice for the removal of director Special notice for the appointment of a person in the place of the removed Even a member holding one share can give the special notice. It is an exception to section 188 - Karnataka Bank vs A.B.Datar

REMOVAL OF DIRECTORS - SECTION 284 HIGHLIGHTS 1 Procedure for removal 2 Director who cannot be removed 3 Special notice requirement 4 Reason for removal not required 5 Articles cannot prohibit removal Details 1 Procedure for removal a Notice for removal - by member of company b Special notice must be given in 14 days before GM c Company forward the copy to director concerned d Director has right to make his representation against removal e If representation is deflamatory - as per CLB Yes - no need to circulate the same and he can not readout the same in GM, director have to pay the cost Application to CLB can be made by the company or any aggrieved person f Representation by director - sent to member at least 7 days before GM g If representation not sent the same shall be readout at GM h GM shall be held, director has a right to be heard at the meeting Oral represetation can be made in addition to written one by the directior. It is i the right of the director. j Director removed if OR is passed Any person can be appointed as director in his place, but a special notice has k to be given to the company 2 a b c d Director who cannot be removed Nominee director appointed u/s 408 Director appointed u/s 265 - Proportional representation Nominee director appointed by FI constituted under special act of parliament Director of private company holding office for life as on 1.4.1952. Hence permanent director of private company can be removed u/s 284, if he has been appointed after 1.4.1952

3 Special notice requirement Special notice need not comply with provisions of sec 188. Therefore even a member holding one share can give notice u/s 284 4 Reason for removal not required Member proposing removal is not bound to give explanatory statement for removal and it is the duty of the board to give the same Hence member cannot be compelled to disclose the reason for removal - LIC vs ESCORTS LTD

5 Articles cannot prohibit removal Articles cannot restrict the shareholder his right to remove the director u/s 284

COMMENTS 2 special notice in this section and it is very interesting to note the same Special notice for the removal of director Special notice for the appointment of a person in the place of the removed Even a member holding one share can give the special notice. It is an exception to section 188 - Karnataka Bank vs A.B.Datar