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A company wishes to appoint as its managing director a person who is already managing director or manager of other companies. Under the third proviso to section 203(3) of the Companies Act, 2013,…

Question and options

A company wishes to appoint as its managing director a person who is already managing director or manager of other companies. Under the third proviso to section 203(3) of the Companies Act, 2013, with unanimous Board approval after specific notice, of how many other companies at most may that person already be managing director or manager?

  1. One

  2. Five

  3. Two

  4. Three

Answer and explanation

Correct answer: A - One

The third proviso to section 203(3) of the Companies Act, 2013 allows a company to appoint as managing director a person who is managing director or manager of one, and of not more than one, other company, if the appointment is approved at a Board meeting with the consent of all directors present and specific notice has been given. The limit of two other companies belonged to the Companies Act, 1956.

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