Chapter 5
Managing Agents  

(1) A managing agent may be appointed in the following circumstances : 

(a) In case there is provision for the appointment of a managing agent  in the memorandum or in the articles, or 

(b) In case a special resolution for appointing a managing agent is  passed by the general meeting, and the agreement between the company and the managing agent is approved by the concerned department. 

(2) A managing agent appointed prior to the promulgation of this act shall remain in office for the term prescribed in the agreement or contract concluded between him and the company, or provided for in  the memorandum or the articles. On the expiry of this term, the  provisions contained in Sub-Section (1) and Section 75 shall be applicable to such managing agent also. 

(3) Sub-Section (1) and Clause (a), (c), (f) and (g) of Sub-Section  (2) as well as the provision of Sub-Section (3) of Section 66, which  relate to the appointment and term of directors, shall be applicable  to managing agent also. 

75. Term of Managing Agent 

The maximum term of a managing agent appointed under Section 74 shall be fifteen years with effect from the date of his appointment  for the first time. Thereafter, his term may be extended by maximum of ten years at one time with the approval of the general meeting of the company and the appropriate department. 

76. Remuneration, etc. of Managing Agent 

(1) In case the remuneration and the commissions of the managing agent are not prescribed in the memorandum or the articles, these shall be as prescribed by the general meeting subject to the agreement signed between the company and the managing agent. Such commissions shall not exceed ten percent of the net profit of the company. 

Provided that such remuneration and commissions shall have been approved by the appropriate department. 

(2) For the purpose of Sub-Section (1), the net profit of the company shall be calculated after making the following deductions from the gross income of the company during any financial year : 

(a) Bonuses to be paid to employees and workers of the company. 

(b) Taxes, dues, fees, etc. imposed by His Majesty's Government or any other agency on the company in accordance with the law. 

(c) Losses brought forward from the previous financial year, bring  the excess of expenditure over income. 

(d) Expenses incures in litigation. 

(e) Losses, compensation or fines paid by the company according to the orders or decisions of the court. 

(f) Premium to be paid to insurance company. 

(g) Expenses  involves in running the company. 

(h) Interest on loans and debentures. 

(i) Repair and maintenance expenses. 

(j) Depareciation. 

(k) Contributions on donations made by the company. 

(l) Premiums on the sale of Shares. 

(m) Value of forfeited shares. 

(n) Amounts invested by the company, which are considered to be  irrecoverable. 

(o) Profits from the sale of the company's assets. 

(p) Salaries, remunerations, fees, allowances, etc. paid to the directors, managing agent or other employees of the company. 

(q) Compensation paid by the company voluntarily. 

(r) Other necessary expenses. 

(3) In case it is required to effect any amendment in any contract  relating to the managing agency signed between the company and the managing agent, a resolution to this effect shall be passed by the general meeting and submitted to the appropriate department for approval. No such amendment shall be made unless approval is obtained from the appropriate department. 

77. Powers and Duties of the Managing Agent : 

(1) Unless otherwise provided for in the memorandum or in the articles, the managing agent shall exercise such powers and perform such functions of the Board of Directors as it may prescribe. 

(2) The managing agent shall exercise his powers and perform his duties in the name of the company, under the supervision of the Board of Directors. 

(3) In case any work of the company is held up on account of the temporary absence of the managing agent for any reason, it may be performed by the Board of Directors during the period of his absence. All work so performed shall be deemed to have ben performed by the managing agent. 

78. Shares to be Purchased by Managing Agent

The managing agent shall subscribe to at least twenty percent of the issued share capital of the company. He shall not be entitled to transfer or mortgage those shares during his term of office. In case any amount remains due from him after he ceases to remain in the post of managing agent, the company may recover it from out of such shares. 

79. Functions Which the Managing Agent Shall Not Perform 

Unless otherwise provided for in remoeandum or the articles, the managing agent or his patner shall not perform or duct others to  function any of the followings functions with the motive of providing  personal profile. 

(a) To undertake any business union the company is already doing, or any similar business connected therewith, competition in with the company. 

(b) To take up a monopoly or sols agency for the sale and purchases of goods manufactured or to be manufactured by the company. 

80. Post of Managing Agent to be Deemed Vacant 

The post of managing agent shall be deemed to be vacant in  the following circumstances : 

(a) If the managing agent is a firm , in case any  partners thereof  become insolvent or in case the firm itself become insolvent for any reason, or 

(b) If the managing agent is a corporate body, in case it goes into  liquidation voluntarily, or according to the orders of the court, or 

(c) In case the managing agent is held by the court to be suffering  form any disqualification under the provision of Sub-Section (3) of  Section 74. 

81. Suspension of Managing Agent 

In case a suit of insolvency is filed against the managing  agent or in case any creditor files any claim against the managing agent on the basis of any document executed by him, and in case the court, before pronouncing a judgement thereon, directs that the assets of the managing agent shall be placed under the charge of a receiver, such managing agent shall be suspended. 

82. In case the managing agent of any company, or if the managing agent is a firm, any of its 
partners, or if the managing agent is a corporate body, the director or any other person who holds the power of attorney, is sentenced to imprisonment by any court after the promulgation of this act, such managing agent shall be dismissed by the Board of Directors. 

(2) In case the managing agent causes losses to the company as a  result of gross regligence or mismanagement of the lousiness of the company, the general meeting of the company may, by m of a special resolution, remove him with the approval or the appropriate department. 

83. Convening of General Meeting 

(1) At least two directors of the company may send a notice in writing  to the Board of Directors requesting the convening of the general  meeting to discuss the resolution mentioned in Section 82. Provided that nothing mentioned in this Sub-Section shall affect the power to convene a general meeting in accordance with other provisions of this act or the articles. 

(2) On receipt of the notice mentioned in Sub-Section (1), the Board of Directors shall duly send a copy thereof to the managing agent and convene an extraordinary general meeting. 

84. Resignation of Managing Agent

(1) Unless otherwise provided for in the memorandum, the articles or  the agreement, the managing agent may resign from his post by submitting a notice to the Board or Directors in advance or three months. But the managing agent shall not relinquish his post unloose his resignation is approved under Sub-Section (5). 

(2) On receipt of the notice of resignation from the managing agent, the Board of Directors shall direct him to prepare and submit a report on all the business and transactions of the company until the day preceding the date specified in such notice of resignation of the date when his term of office expired, as well as a balance-sheet and a profit and loss account for the period begining from the date when the last balance sheet was presented to the date of the termination of the managing agency. 

(3) In case the managing agent fails to prepare such report, balance sheet or profit and loss account as directed by the Board of  Directors under Sub-Section (2), the Board of Directors itself shall prepare these documents. 

(4) The Board of Directors shall submit such report, profit and loss account, balance-sheet as well as the report of the auditor, to the general meeting of the company along with the letter of resignation tendered by the Managing agent. 

(5) After the resignation of the managing agent is submitted in accordance with Sub-Section (4), the general meeting, by means of a resolution or may not accept the resignation. 

85. Liability of Managing Agent 

In case the company incurs losses because of the failure of  the managing agent to fulfill his duty or of any unauthorised action taken by him during his term of office, such managing agent shall continue to be liable for such losses after the termination or relinquishment of his managing agency. 

86. Notice to be Sumitted to Appropriate Department

In case the post of managing agent falls vacant for any reason, the company shall notify the appropriate department accordingly. 

87. Claims of Other Persons  to Managing Agency Not to be Entertained

88. Claim for Compensation Not to be Entertained 

In case the managing agent is suspended or dismissed, or in as his resignation is accepted under this act, he shall not be entitled to file any claim against the company for any compensation. But in case there is any other kind of transaction between him and the company, this Section shall not be deemed to have debarred the managing agency from filing claims in respect to such transactions. 

89. Personal Liability for Payment 

In case the managing agency of a public company is operated  jointly by more than one person, such managing agency shall be registered at the appropriate department in accordance with this act. In case compensation is to be paid for the losses or damages a used by such managing agent, such amount as cannot be paid from out of the assets of the managing agency shall be recovered from out of the personal property of every partner thereof, as a director is required to do under Section 72. 

90. Liability of Directors 

In case the managing agency of a public company causes any  loss or damage to the company deliberately or through regligence or by working in contravention of this act, he shall be liable for such losses or damages. But in case such loss or damage. But in case such loss or damage has resulted from the failure of the Board of Directors to pay proper attention or make proper arrangements, the directors also shall bear liability for such portion of the losses as cannot be recovered from the managing agent.