Appointment of director by smallshareholder

According to section 151 of Companies Act 2013, Read with Rule 7 of Appointment and Qualification of Directors Rules 2014, Every Listed Company shall have Director elected by small shareholders.

Small shareholder means the shareholder holding the nominal value of shares not more than 20, 000 rupees

Small shareholder director shall be considered as independent Director of the listed company and shall file declaration of independence as per section 149(7)

Small shareholder director shall be elected throgh postal ballot

Such Director shall not be retire by rotation and shall have tenure of 3 continous year.

No person shall hold the position of small shareholder director in more than 2 companies at same time and person holding the position in second Company shall not have business in conflict with the business of First Company

Relevant Section:151

Applicable to : Only Listed Companies

Appointment :  on suo moto by the Company itself or on application received from the Small share Holders

Small Share Holders : Share holders who posses shares of FACE VALUE not more than 20,000

Requirement for approving Application:

No of share holders should be atleast of the following

1. 1000 small share holders or

2. 1/10th of Total number of share holders

which ever is lower

Time period of Notice :

Atleast 14 Days before AGM

Qualifications required to be a Small Share Holder:

1.  May or may not be a Small share Holder

2.Should comply with requirements of Independent Director

Tenure:

Not exceeding 3 consecutive years

After Retirement:

Not eligible for associating with company in any other capacity either Directly or Indirectly for a period of 3 Years

No of Small share holdership permitted:

Not more than 2 Companies

NOTE: Small Share Holders are included in Total Number of Directors