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| Can a proprietor designate himself as a Managing Director? | Views: 25438 |
| Jan 02, 2011 3:46 pm | | Can a proprietor designate himself as a Managing Director? | # |
K@rth!key@n Ganesan | | I just learnt got a business card of my friends friend where he designated himself as Managing Director. As per my friends knowledge he just did a sales tax registration & service tax registration and doing on his own. Its not even registered in register of firms or register of company affairs or department of labor or BBMP.
I am surprised by the way he is projecting himself to client, friends and public.
Can anyone clarify me pls?Private Reply to K@rth!key@n Ganesan |
| Jan 02, 2011 5:39 pm | | re: Can a proprietor designate himself as a Managing Director? | # |
Manoj Sethu | | An MD designation is only valid in Pvt Ltd or Limited companies.
A proprietorship always is a Proprietor or Owner, can also designate as Consultant on visiting cards, depending on the nature of service he renders; but never MD, Director, CEO, etc.
Some people use the designations to portray as if it is a large company, larger than reality. It is a marketing gimmick and nothing more.
As far as legality is concerned, I think they cannot send out formal letters on letterheads or sign as MD on any statutory or financial documents. But its use on cards would need to be checked, and may apply when someone files complaint on charges of fraud.
I am not sure if there can be a suo moto case against use of designations.Private Reply to Manoj Sethu |
| Jan 03, 2011 2:16 am | | re: re: Can a proprietor designate himself as a Managing Director? | # |
Ari Bloch | |
No, he cannot.
I don't know if it can be designated as fraud, but it is surely in very poor taste.... (same as one person companies, even if they are pvt ltd, designating themselves as "CEO" etc.)Private Reply to Ari Bloch |
| Jan 03, 2011 4:08 am | | re: re: re: Can a proprietor designate himself as a Managing Director? | # |
Subbu Jois | | Legally, A Proprietor can call himself anything in his proprietorship - Director, MD, CEO, whatever. The same goes for Partnerships. There is no law on giving oneself a designation. He cannot call his establishment as Pvt. Ltd or Ltd., however.
The same happens in large companies as well - I have seen sales execs in MNC banks being given fancy designations as AVP - Sales. What say?Private Reply to Subbu Jois |
| Jan 03, 2011 4:39 am | | re: re: re: re: Can a proprietor designate himself as a Managing Director? | # |
KN Murli | | Partners in Partnership firms can call themselves as " Managing Partners" and it is legal. I do not know what is wrong in calling CEO of it is not a Pvt. Ltd. or LTD. company? Private Reply to KN Murli |
| Jan 03, 2011 4:55 am | | re: re: re: re: re: Can a proprietor designate himself as a Managing Director? | # |
Raju Tripathi | | I know one person who runs a very old time advertising agency on Millers Road.
He gave me his business card.
He has designated himself as "Emperor"
Beat this! :)Private Reply to Raju Tripathi |
| Jan 03, 2011 7:56 am | | re: re: re: re: re: re: Can a proprietor designate himself as a Managing Director? | # |
Manoj Sethu | | Coming to think of it, ethically speaking, there's no harm. It is a marketing tool, to showcase the company in good light having a CEO, Director, etc. It is also a tool to make customers comfortable that they are not dealing with some `xyz' who can run away. If the intentions are good, no harm.
It is like having 2 employees and when someone asks how many employees do you have, the answer comes <10 or even worse <100. White lies which are not a lie but doesn't represent the actual fact.
I only wonder what will happen to the confidence of the customer, if he visits the vendor and finds out there are 2 employees and that the person is actually running a proprietorship. That's the only issue as a customer.
Private Reply to Manoj Sethu |
| Jan 03, 2011 8:57 am | | re: re: Can a proprietor designate himself as a Managing Director? | # |
K@rth!key@n Ganesan | | Thanks for your response.
Pl do let me know on below mentioned things
1) apart from proprietor/partner can any other person sign the official papers like contract or agreement or service proposal or invoice etc?
2) Legally, if a proprietor/partner can call himself as anything he wants. Though it can be called as marketing gimmick or tool. Does that mean proprietor/partner is free to project themselves as what they like?
3) When a customer come to know the truth? what will be their course of action?
Private Reply to K@rth!key@n Ganesan |
| Jan 03, 2011 4:15 pm | | re: re: re: Can a proprietor designate himself as a Managing Director? | # |
Jasvinder Singh | | A propreitor can not designate himself as a managing director of a firm under any circumstances. Directors are meant for only companies which are registered under the companies act are are either private or public limited companies.
A company is an entity in itself and a director is appointed by share holding or by a board resolution and this is not applicable to firms.Private Reply to Jasvinder Singh |
| Jan 03, 2011 4:21 pm | | re: re: re: Can a proprietor designate himself as a Managing Director? | # |
Jasvinder Singh | | a parnership firm has a partnership deed and the partners can do only what is authorised to them is this partnership deed and nothing else. Again there are managing partners, working partners and sleeping partners also.
It is also totally illegal to dspaly the designation of managing or any other director by the partners or employees of any firm. Such people can be prosecuted for fraud. The term director refers to companies only and the companies act is very clear about what a company is and a firmn is in no way a company. Private Reply to Jasvinder Singh |
| Jan 04, 2011 12:24 pm | | re: re: re: re: re: Can a proprietor designate himself as a Managing Director? | # |
Nagarajan B | | Some important questions :)
Does a manager actually manage? Does a director actually direct?
I believe, if a customer is able to get the product or service he is looking for and is able to perceive a clear value add in the business relationship, then it really should not matter what designation the person carries.
Having said that, my understanding is
1) the head of a proprietorship concern is called Proprietor / Proprietrix (can be only one person)
2) a business partnership can be between two or more people and all are called partners
3) a private limited company can have anywhere between two to fifty directors on the board (directors can also be shareholders with equity in the company)
4) a public limited company will have same structure as private limited but the paid up equity capital needs to be minimum one crore and can have public shareholders if it is a listed company.
Usually the board of management votes and decides who should be the managing director in the general body meeting. The board can also have managing directors in rotation for specific periods of time.
For most small entities, the person at the top usually dons multiple hats of CEO, Director, Accounts person, HR person, Sales person, Admin person, Office Boy, etc. depending on the need of the hour :)Private Reply to Nagarajan B |
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