PROMOTER DIRECTORS
This query is : Resolved
26 January 2011
IF THE FIRST DIRECTORS MENTIONED IN THE ARTICLES OF ASSOCIATION DO NOT SUBSCRIBE TO SHARES AND ARE NOT SUBSCRIBERS TO THE MEMORANDUM, WILL THEY STILL BE CALLED PROMOTER DIRECTORS OR SHOULD THEIR CATEGORY BE MENTIONED AS INDEPENDENT IN THE E-FORM-32 FILED FOR INCORPORATION
26 January 2011
The Companies Act,1956 does not have a definition of `independent directors’ though the definition of independent director as given in clause 49 of listing agreement is an inclusive definition, which says as follows:-
”For the purpose of this clause the expression ‘independent directors’ means directors who apart from receiving director’s remuneration, do not have any other material pecuniary relationship or transactions with the company, its promoters, its management or its subsidiaries, which in judgment of the board may affect independence of judgment of the directors4.”
There are no provisions for appointment of independent director in the above said act. The appointment of independent directors in case of listed companies are governed by the SEBI, but in case of unlisted company there is no such requirements.
You may also refer the prospectus regarding the status of such directors.
To conclude, their appointment being not supported by resolutions in Board Meeting / General meeting, as per my understanding, they are "promoter directors".
”For the purpose of this clause the expression ‘independent directors’ means directors who apart from receiving director’s remuneration, do not have any other material pecuniary relationship or transactions with the company, its promoters, its management or its subsidiaries, which in judgment of the board may affect independence of judgment of the directors4.”
There are no provisions for appointment of independent director in the above said act. The appointment of independent directors in case of listed companies are governed by the SEBI, but in case of unlisted company there is no such requirements.
You may also refer the prospectus regarding the status of such directors.
To conclude, their appointment being not supported by resolutions in Board Meeting / General meeting, as per my understanding, they are "promoter directors".
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