1. Call and convene a meeting of the Nomination and Remuneration Committee. The Nomination and Remuneration Committee of the Company shall with a due diligence select and recommend an individual to be appointed as an Independent Director after ensuring that there is an appropriate balance of skills, experience and knowledge.
2. As per Rule 6 of Companies (Appointment and Qualification of Directors) Rules, 2014, an Individual shall be selected from the databank of Independent Directors maintained by the Indian Institute of Corporate Affairs.
3. Ensure that the person to be appointed fulfills the conditions specified under Section 149(6) of the Companies Act, 2013 and Rule 5 of Companies (Appointment and Qualification of Directors) Rules, 2014.
4. Ensure that the person who is proposed to be appointed as an ID must have an active DIN and not disqualified u/s 164 of the Companies Act, 2013.
5. Check no. of the Companies in which he is already a director on MCA Portal, and ensure that such appointment if made, would not exceed the limits as specified under section 165 of the Act.
6. Obtain written consent in Form DIR-2 pursuant to section 152(5) and Rule 8 of Companies (Appointment and Qualification of Directors) Rules, 2014.
7. Obtain Form DIR-8 stating that he is not disqualified to become a director pursuant to Section 164(2) and Rule 14(1) of Companies (Appointment and Qualification of Directors) Rules, 2014.
8. As per Section 173(3) of the Companies Act, 2013, an issue not less than 7 days’ Notice and Agenda of Board Meeting and send it to all Directors Conduct a Meeting of Board of Directors and ascertain whether Quorum required for Board Meeting under Section 174 is present.
9. Pass the following Board Resolution
- appointment of Independent Director which shall mention the following,
- the term of appointment
- the remuneration, sitting fees, reimbursement of expenses for participation in the Boards and other committee meetings and profit related commission, if any.
10. Formalize the appointment through a letter of appointment, which shall be as per the Schedule IV:
- the term of appointment;
- the expectation of the Board from the appointed director;
- the Board-level committee(s) in which the director is expected to serve and its tasks
- the fiduciary duties that come with such an appointment along with accompanying liabilities;
- provision for Directors and Officers (D and O) insurance, if any;
- the Code of Business Ethics that the company expects its directors and employees to follow;
- the list of actions that a director should not do while functioning as such in the company; and
- the remuneration, mentioning periodic fees, reimbursement of expenses for participation in the Boards and other meetings and profit related commission, if any.
11. File Form DIR- 12 within 30 days from the appointment of the Independent Director.
12. If there are any changes in Committee then reconstitute the existing Committees of the Company after his appointment as required under the Companies Act, 2013.
13. Publish the terms and conditions of the appointment on the website of the Company.
14. At the first Board meeting attended by the Independent Director,
- obtain a declaration from the ID that he satisfies the criteria of independence as provided under section 149(6) and
- obtain certificate of registration with the Indian Institute of Corporate Affairs.
- obtain a declaration from the appointed director regarding his interest in other entities in Form MBP-1 under Section 184 (1) read with Section 189 (2)
(within 30 days of appointment or first BM in which he participates as director, whichever is earlier)
15. As per Section 160(1) of the Companies Act, 2013, ensure that Company receives, at least 14 days before the General Meeting at the registered office of the company, a notice in writing under his hand signifying his candidature as a director or, as the case may be, the intention of such member to propose him as a candidate for that office.
As per Section 160(2) of the Companies Act, 2013, The company shall inform its members of the candidature of a person for the office of director under sub-section (1) in the following manner,
The company shall, at least 7 days before the general meeting, inform its members of the candidature of a person for the office of a director or the intention of a member to propose such person as a candidate for that office-
(1) by serving individual notices, on the members through electronic mode to such members who have provided their email addresses to the company for communication purposes, and in writing to all other members; and
(2) by placing a notice of such candidature or intention on the website of the company
Provided that it shall not be necessary for the company to serve individual notices upon the members as aforesaid, if the company advertises such candidature or intention, not less than seven days before the meeting at least once in a vernacular newspaper in the principal vernacular language of the district in which the registered office of the company is situated, and circulating in that district, and at least once in English language in an English newspaper circulating in that district.
16. Approve the appointment of Independent director at the General Meeting by passing an Ordinary Resolution held after the Board Meeting.
As per Section 150 (2), the explanatory statement annexed to the notice of the General Meeting for approving the appointment of an Independent Director shall indicate the justification for choosing the appointee for appointment as an independent director.
17. Make entries in the Register of Directors.
Disclaimer: The entire contents of this document have been prepared on the basis of relevant provisions and as per the information existing at the time of the preparation. In No Event Shall I Shall Be Liable For Any Result Arising Out Of Or In Connection With the Use of the Information.
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