Kalidas Ramaswami
Quick Summary
The appointment of an alternate director is regulated by the provisions contained in Section 161(1) of the Companies Act, 2013 (hereinafter referred to as "the Act"). The pre-requisite to such an appointment would be the existence of enabling provisions in the company's articles conferring on the bo
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FAQ :
The appointment of an alternate director is primarily regulated by Section 161(1) of the Companies Act, 2013, which requires enabling provisions in the company's articles of association or authorisation from members at a general meeting.
Under the previous Act, an alternate director could be appointed if the original director was absent from the state where board meetings were held. The Companies Act, 2013, allows appointment if the original director is away from India for a minimum of three months.
Section 161(2) stipulates that an alternate director cannot already hold another alternate directorship or be a director in the same company. Additionally, an alternate for an independent director must meet the criteria for independent directorship.
No, in listed companies, SEBI (LODR) Regulations, 2015, as amended, do not permit the appointment of an alternate director for an independent director.
No, the appointment of an alternate director does not constitute delegation of office by the original director. An alternate director acts in their own right and is responsible for their own decisions.
The widespread use of video conferencing for board meetings allows original directors to participate from anywhere, negating the need for physical presence. Furthermore, directors must attend meetings to avoid disqualification, making virtual attendance more practical than appointing an alternate.
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