Question

It is uncommon to appoint a person as a managing director ___________.

• A. if he is of unsound mind
• B. he has been convicted by court
• C. he is not an insolvent
• D. both A and b

Answer 1

Answer: (D)

both A and b

Under section 196 of the act no company shall appoint or continue the employment of any person as managing director, whole-time director or manager who —

(a) is below the age of twenty-one years or has attained the age of seventy years: Provided that appointment of a person who has attained the age of seventy 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;

(b) is an undischarged insolvent or has at any time been adjudged as an insolvent;

(c) has at any time suspended payment to his creditors or makes, or has at any time made, a composition with them; or

(d) has at any time been convicted by a court of an offence and sentenced for a period of more than six months