Appointment of director by smallshareholder
ritu mehta (article) (62 Points)
25 May 2016
Pls explain the provisions of this section
ritu mehta (article) (62 Points)
25 May 2016
Jatin Bajaj
(CS)
(2928 Points)
Replied 26 May 2016
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
CA Devi Prasad Reddy P
(Senior Business Analyst)
(101 Points)
Replied 26 May 2016
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
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