Summary of 27 Chapters on Board of Directors’ in 27 Pages covering about 30% Examination Paper
Company To Have Board Of Directors (Section 149)
(1) Minimum Number of Directors
• For public company, minimum number of directors is 3
• For private company, minimum number of directors is 2
• For One person company, one director is the minimum director.
(2) Maximum Number of directors
• Maximum number of directors is 15 for each kind of company
• After passing special resolution company may appoint more than 15 directors.
(3) Woman Director (Sub sec. 1)
Woman Director on the Board (Rule 3) Companies (Appointment of Directors)Rules 2014
Class of companies shall appoint minimum one woman director –
(a) Listed company
(b) Other public company
- With paid up capital of 100 crore of rupees or more or
- Turnover of 300 crore of rupees or more
(4) Resident Director: Every company to have at least one director having stayed in India for total period of not less than 182 days in previous Calendar Year.
(5) Independent Director (Sub sec. 4)
In case of Listed Company at least 1/3rd of total number of directors will be independent directors. Any fraction in 1/3rd shall be rounded off as one (In a company where Audit Committee is constituted, minimum number of directors shall be 2 and not 1 of 3 directors.)
(i) For public companies (not listed companies) at least 2 directors will be independent directors.
(a) Public companies with paid up capital of 10 crore of rupees or more or
(b) Public companies having turnover of 100 crore of rupees or more
(c) Public companies which have outstanding loans, debentures and deposits exceeding 50 crore rupees.
(ii) (a) Who can be Independent Director?
One who is a person of integrity and has expert knowledge.
(b) Who cannot be Independent Director?
|
Managing Director |
Whole Time Director |
Nominee Director. |
|
Nominee director is one nominated by financial institution or may be appointed by Govt. or by any person to represent its or his present. |
(iii) Term of the Independent Director:
To hold office for a term up to 5 consecutive years.
Eligible for re-appointment on passing of special resolution by the company. Disclosure of such appointment be made in Board’s report
(Remember one term is up to 5 years)
Not more than 2 consecutive terms
No independent director shall hold office for more than 2 consecutive terms. After completion of 2 consecutive terms, he will be eligible for the appointment after a gap of three years. But during 3 years he shall not be appointed in the company nor be associated with the company in any capacity.
(iv) Vacancy: Vacancy be filled up by Board not later than immediate next Board meeting or 3 months whoever is later.
Maintenance of Data Bank
(Selection of Independent directors) (Sec. 150)
Data Bank shall be kept & maintained and Independent director may be selected from a data bank Data Bank to contain names, addresses & qualifications of persons eligible & willing to act. It will be maintained by agency with experience in creation & maintenance of data bank.
Courtesy: Prof. RD Maheshwari
To read the full article: Click here
To enrol for the class on Corporate & Allied Laws of the author: Click here
CAclubindia
