Is it possible for a company to appoint or continue with a director aging 70 years or above? Answer to it is affirmative that too without any restriction. However a Managing Director, Whole-time Director or Manager cannot be appointed or continued if aged 70 years or above, but their appointment is also possible subject to fulfillment of certain conditions given in section 196 of Companies Act, 2013. Many companies appoint such persons aging 70 years or above with regard to their respective worthy experiences which may help in the tremendous growth of the company.
It can be explained with the reference of provisions given in clause (a) of sub-section (3) of section 196 of Companies Act, 2013 which states as follows –
No company shall appoint or continue the employment of any person as managing director, whole-time director or manager who is below the age of 21 years or has attained the age of 70 years.
Provided that appointment of a person who has attained the age of 70 years may be made by passing a special resolution in which case the explanatory statement annexed to the notice for such motion shall indicate the justification for appointing such person.
Provided further that where no such special resolution is passed but votes cast in favour of the motion exceed the votes, if any, cast against the motion and the Central Government is satisfied, on an application made by the Board, that such appointment is most beneficial to the company, the appointment of the person who has attained the age of seventy years may be made.
Analysis of above provision –
1. Managing director, Whole-time director or Manager cannot be appointed if he is below the age of 21 years.
2. Managing director, Whole-time director or Manager can be appointed if aged 70 years or above subject to some restrictions.
3. For MD, WTD or Manager to be appointed if aged 70 years or above following procedure shall be followed –
(a) Explanatory statement along with the notice of general meeting to be send to the members of the company explaining the justification to appoint such aged person.
(b) Special resolution to be passed in such general meeting to appoint such MD, WTD or Manager.
(c) If such special resolution has not passed, but ordinary resolution has been passed (more than one half of the votes cast in the favour of the motion), than also such appointment can be made but only after obtaining approval of Central Government on which Central Government is being satisfied that such appointment is most beneficial for the company.