Manager Under Companies Act
Under Section 2(53): a Manager is an individual who has management of the whole or substantially the whole of the affairs of the company -- subject to the Board's superintendence. Section 196 governs the appointment -- requiring Board Resolution + Shareholder Approval. A company can have EITHER a Managing Director OR a Manager -- not both simultaneously (Section 196(2)). The Manager's remuneration is subject to Section 197 limits (same as MD -- 5% of net profits for single MD/Manager, 10% for multiple). Schedule V applies for nil/inadequate profit situations.
Specimen Agreement -- Key Clauses
1. Appointment: The Company appoints [Name] as Manager for [3/5] years from [Date], pursuant to Board Resolution dated [Date] and Shareholder Resolution dated [Date].
2. Powers and Duties: The Manager shall manage the affairs of the Company subject to Board direction. Powers include: (a) general management of day-to-day operations, (b) employment/termination of staff, (c) entering contracts within approved limits, (d) representing the Company before authorities, (e) signing documents on behalf of the Company.
3. Remuneration: [Monthly salary + perquisites + commission -- same structure as MD agreement]. Subject to Section 197 limits and Schedule V.
4. Restrictions: The Manager shall NOT: (a) engage in competing business, (b) disclose confidential information, (c) exceed Board-delegated authority.
5. Termination: [3] months notice by either party. Immediate termination for misconduct, insolvency, or disqualification under Section 196(3).
Filing Requirements
(a) File Form MR-1 (Return of Appointment of Manager) with ROC within 60 days. (b) Form DIR-12 if the Manager is also appointed as director. (c) Form MGT-14 for the shareholder resolution.
Manager vs MD -- Distinction
| Feature | Manager | Managing Director |
|---|---|---|
| Must be Director? | NO -- need not be a director | YES -- must be a director |
| Board member? | May or may not attend Board | Attends Board as member |
| Voting at Board? | NO voting right (unless also director) | Full voting right as director |
| Appointment | Board + Shareholder | Board + Shareholder |
| Remuneration | Same limits (Section 197) | Same limits (Section 197) |
Disclaimer: This article is for informational purposes only and does not constitute legal or professional advice. While every effort has been made to ensure accuracy based on the latest laws and amendments, readers should consult a qualified professional before acting on any information provided. For expert assistance, contact us.