Directors

sections 149- 172

Directors

• Directors are persons in charge of management of business of company

• Only individuals can be Directors

No of Directors

• Public co – Min 3• Private co – Min 2• One Person co - 1• Maximum – 15, more than 15 by spcl resln

No of Directors

• Woman Director – 1 in specified cos• Resident Director- 1 in specified cos • Independent Director – 1/3 rd in listed

companies

Director Identification Number

• DIN essential for appointment as Directors• Application to CG for DIN to be filed• Director to inform DIN to company• Company to inform DIN to ROC• Two DIN not permissible

Appointment of Directors

• First Directors• Subsequent Directors• Supplementary Directors

First Directors

• As per procedure in AOA• If not, subscribers to MOA become Directors• To be appointed at first AGM• Director to give consent before appointment

as Director – to be filed with ROC

Subsequent Directors

• Elected by shareholders at AGM

• 14 days notice for appointment to be given

Rotation of Directors

• 2/3rd liable for rotation (excl Independent Directors)

• 1/3rd retire at second AGM• Retiring Directors eligible for reappointment

Additional Director

• Can be appointed if so authorised by AOA• Person should not have failed in appointment

at earlier AGM• Holds office till next AGM

Alternate Director

• Appointed by the Board as Director in place of Director away from India for 3 months

• Holds office for balance term of original Director

• Vacates office if original Director returns• Alternate for ID if so qualified

Nominee Director

• BOD may appoint any nominee of Institution as per law /agreement,

Casual vacancy

• Arises in case of death, resignation of Director• BOD may fill up vacancy, if AOA allows• Holds office till balance term of original

Director

Small shareholders’ Director

• Small shareholders – shares of Rs. 20,000

• Listed co may provide for it in AOA

Independent Director

• Other than MD, WTD, Nominee Dir• Board considers him person of integrity with

expertise/experience• Not related to promoters / Directors• No pecuniary relations with company /

promoters/ Directors/ holding co/subsidiary in current and last two years

• No relative with 2% of turnover

Independent Director

• Not held key management position, employee in last 3 years

• Not been partner in audit firm, consultancy firm that had dealings with co

• Not holds 2% voting power, with relatives

Independent Director

• Any change in status to be informed to co• Term – 5 years, eligible for second term with

special resolution• Third term after 3 years provided no

association with co in the interval

Disqualifications

• Unsound mind, insolvent• Convicted for 6 months imprisonment and 5

years after • Disqualified by court to be Director• Not paid calls for 6 months• Convicted for related party transc.• Director in a co that not filed fin statements

for 3 yrs or defaulted in payments

Max no of directorships

● Max no of cos – 20• Public cos – 10 (incl pvt cos which are holding

or subsidiary co of public co)

• Can be further reduced by special resolution

Board meetings

• 4 meetings in a year• Not more than 4 months time in between two

meetings• Directors can participate in person or by video

conferencing / audio visual means• 7 days notice for meeting to be given

Quorum

• Means minimum no required for a valid meeting

• One third Directors (non interested) forms quorum

• If Interested Directors more than 2/3rd, Non IDs makes quorum, if not less than 2

Board Decisions

• At regular meeting or by circulation• Circulation – draft to be circulated• Needs approval by majority for decision• To be noted at next meeting• 1/3rd Directors may require circulation item

to be considered at meeting

Board Committees

• Audit Committee• Nomination and Remuneration Committee• Stakeholders Relations Committee

Powers of Board

• Board authorised to do all acts that company can do

• Except powers vested with shareholders at General Meeting

• Following Powers only at meeting – call for unpaid shares, Buyback, issue securities, borrow, invest, grant loans, diversify business, approve fin statements, M&As

Powers by special resolution at GM

• Sell, dispose of undertaking• Investment of amount recd from M&As• Borrow in excess of paid up capital +free

reserves• Remit any loan to Director