10 May 2014
A company has appointed 4 independent directors, who are liable to retire by rotation prior to the coming into force of the CA,2013.Will it be necessary for it to change their terms of appointments to non-rotational basis at the coming AGM or they can continue as such till completion of their existing tenures?
10 May 2014
Sir, the designation of director as Independent Director prior to Companies Act, 2013 was not statutorily required. It may by virtue of Articles or by Clause 49, such directors would be designated as Independent Director. Also independent directors u/149(6)(c) of new Act cant have pecuniary relationship with company for two years prior or in current financial year. So, in my view such existing directors cannot continue as Independent Director in new Act. Views solicited.
11 May 2014
Suppose the independent directors appointed prior to coming into force of the CA,2013 still fulfills the eligibility criteria and as per their terms of appointments ,they are liable to retire by rotation.Will it be advisable to the company to retain them as IDs but change their terms of appointment for a fixed tenure for the remaining period at their coming AGM?
11 May 2014
Sir, it is possible. So long as the eligibility mentioned u/s 149(6) is fulfilled by existing director(s), they can be considered for appointment as independent director in upcoming AGM.They can hold office for 5 consecutive years and may be reappointed for further 5 years.
15 May 2014
If they fulfill the eligibility criteria,for the purpose of their reappointments,whether NRC recommendations will be necessary?Will it be necessary to deposit fees for appointments of IDs.Kindly note that they are recommended by the Board for appointment and not by any intending shareholder.
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