Nomination by member ‑ Company which has not paid subscription ‑ Subsequent election as committee member ‑ Validity of - Companies Law - No. 23(29)‑CL‑IV/64,

Circular : No. 23(29) ‑ CL ‑ IV/64, dated 7 ‑ 5 ‑ 1964. Subject:- Nomination by member ‑ Company which has not paid subscription ‑ Subsequent election as committee member ‑ Validity of Query : Section 25 companies which have made provisions in their articles of association that the companies in their membership will not be entitled to vote in the election of directors (committee members) unless they have paid their subscription for the relevant year. The member-companies are entitled to nominate their representatives for election to the committee. In case, one of the nominees happens to be nominated by a member‑company, which has not paid the subscription for the relevant year, the point for clarification is whether such nomination and his subsequent election as committee member will be invalid under the law. The articles of association of the company concerned do not as such disqualify a person being nominated for election by a member‑company which has not paid subscription. Answer : There can be no objection to the nomination and election of a person nominated by a member‑company which has not paid the subscription for the relevant year.