SEC 149(1) MINIMUM & MAXIMUM NO.

OF
DIRECTORS

EVERY CO. SHALL HAVE A BOARD OF DIRECTORS

CONSISTING OF ONLY INDIVIDUAL DIRECTORS
MIN DIRECTORS MAX DIRECTORS
OPC 1 15
PRIVATE CO. 2 15
PUBLIC CO. 3 15
PROVIDED THAT CO. MAY APPOINT MORE THAN
15 DIRECTORS BY PASSING SR IN GM.
SEC 8 CO. & GOVT CO. ARE EXEMPTED FROM SEC 149(1)(b) &
THE FIRST PROVISO. HOWEVER, SEC 8 WILL BE EXEMPTED ONLY
IF IT HAS NOT DEFAULTED IN FILING FINANCIAL STATEMENT U/S
137 OR ANNUAL RETURN U/S 92

AS PER REGULATION 17 OF SEBI (LISTING OBLIGATION &

DISCLOSURES REQUIREMENTS) REGULATIONS 2015, TOP 2000
LISTED COMPANIES SHALL HAVE MINIMUM 6 DIRECTORS
PROVIDED FURTHER THAT ATLEAST 1 WOMAN DIRECTOR SHALL
BE IN THE BOD OF SUCH COMPANIES AS MAY BE PRESCRIBED.

RULE 3 OF THE COMPANIES (APPOINTMENT & QUALIFICATION

OF DIRECTORS) RULES 2014, FOLLOWING COMPANIES MUST
HAVE ATLEAST 1 WOMAN DIRECTORS-

LISTED CO., OR UNLISTED PUBLIC CO.

UNLISTED PUBLIC CO. HAVING
HAVING T/O MIN 300
PUSC HAVING PUSC
CRORE
MIN 100 CRORE

NEWLY INCORPORATED CO. UNDER THIS ACT SHALL COMPLY WITH ABOVE
PROVISIONS OF WOMAN DIRECTOR WITHIN 6 MONTH OF INCORPORATION
 CASUAL VACANCY OF WOMAN DIRECTOR
SHALL BE FILLED BY BOD IN IMMEDIATE NEXT BOARD MEETING OT
WITHIN 3 MONTHS OF CASUAL VACANCY WHICHEVER IS LATER.
AS PER REGULATION 17 OF SEBI (LODR) REGULATIONS 2015, TOP
1000 LISTED COMPANIES SHALL HAVE ATLEAST 1 INDEPENDENT
WOMAN DIRECTOR

SEC 149(2) TRANSITIONAL DIRECTOR

EVERY CO. EXISTING ON OR BEFORE THE COMMENCEMENT OF

THIS ACT SHALL COMPLY WITH 149(1) WITHIN 1 YEAR FROM
COMMENCEMENT OF THIS ACT.
 SEC 149(3) RESIDENT DIRECTOR

APPLICABILITY EXEMPTION
IFSC PVT
EVERY MEANING PROPORTIONATE
AND IFSC
COMPANY CALCULATION PUBLIC
ATLEAST 1 DIRECTOR
SHOULD HAVE STAYED ITS CALCULATED CO.ARE
IN INDIA FOR ATLEAST PROPORTIONATELY EXEMPTED
182 DAYS DURING THE FOR THE 1ST FY. IN THEIR 1ST
FINANCIAL YEAR E.G- CO. INCORPORATED FY.
ON 1.12.21 THEN ITS 1ST 182/365 * 121
FY WILL END ON 31.3.22 = 61 DAYS
& PROPORTIONATE DAYS
OF RESIDENT DIRECTOR
 RULE 4
LISTED PUBLIC CO.
UNLISTED PUBLIC CO.
SHOULD HAVE ATLEAST SHALL HAVE ATLEAST 2 INDEPENDENT
1/3RD OF TOTAL DIRECTORS IF ANY OF 3 CONDITIONS
DIRECTORS AS ATTRACTED
INDEPENDENT & ANY
PUSC T/O MIN LOAN /
FURTHER IS R/O TO 1 MIN 10 100 DEBENTURE /
CRORE CRORE DEPOSITS >
E.G-
TOTAL DIRECTOR * 1/3 = INDEPENDENT DIRECTOR 50 CRORE
9 * 1/3 = 3
HOWEVER, AN UNLISTED PUBLIC CO. IS
10 * 1/3 = 3.33 = 4
EXEMPTED IF IT’S A
11 * 1/3 = 3.67 = 4
JOINT DORMANT
WOS
VENTURE CO.
 IF ANY OTHER SECTION REQUIRES APPOINTMENT OF HIGHER
NO. OF INDEPENDENT DIRECTORS THEN APPOINT SUCH HIGHER
NO. OF INDEPENDENT DIRECTORS.

E.G- SEC 177 REQUIRES MAJORITY DIRECTORS IN AUDIT

COMMITTEE TO BE INDEPENDENT & IF CO. CO HAS 5 DIRECTORS
IN AUDIT COMMITTEE THEN ATLEAST 3 MUST BE INDEPENDENT
DIRECTOR

NOTE- THE LIMITS OF PUSC, T/O IN WOMAN DIRECTOR & PUSC,

T/O , LOAN, DEBENTURE, DEPOSITS IN INDEPENDENT
DIRECTORS WILL BE CHECKED AS PER LATEST AUDIT FINANCIAL
STATEMENTS
 CASUAL VACANCY OF INDEPENDENT DIRECTOR

SHALL BE FILED UP BY BOD IN IMMEDIATE NEXT BOARD

MEETING OR 3 MONTHS OF CASUAL VACANCY WHICHEVER IS
LATER.

SEC 149(5)- TRANSITIONAL PROVISION

EXISTING COMPANIES TO COMPLY WITH 149(4) WITHIN 1 YEAR FROM

COMMENCEMENT OF THIS ACT.

AS PER THE COMPANIES RULES, IF AN UNLISTED PUBLIC CO. CEASES TO

ATTRACT ANY OF THE ABOVE 3 CONDITIONS FOR CONSECUTIVE 3 YEARS,
THEN THE REQUIREMENT OF INDEPENDENT DIRECTORS SHALL NOT REMAIN
UNLESS IT ATTRACTS ANY OF THE 3 CONDITIONS AGAIN.
 AN INDEPENDENT DIRECTOR IN RELATION TO A COMPANY
MEANS A DIRECTOR OTHER THAN MD OR WTD OR NOMINEE
DIRECTOR AND SATISFIES ALL THE FOLLOWING CONDITIONS-
A) B)
WHO IN THE OPINION OF BOD WHO IS NOT A RELATIVE OF C)
IS A PERSON OF INTEGRITY, WHO IS AND WAS NOT THE
PROMOTER OF CO. OR ITS PROMOTER OR DIRECTOR OF WHO HAS OR HAD NO PECUNIARY
AND POSSESS RELEVANT CO. / HOLDING/
EXPERTISE & EXPERIENCE HOLDING, SUBSIDIARY, RELATIONSHIP WITH CO. / H/S/A OR
ASSOCIATE. SUBSIDIARY/ASSOCIATE ITS PROMOTER/DIRECTOR OTHER
THAN

REMUNERATION TRANSACTION NOT

RECEIVED AS SUCH EXCEEDING 10% OF HIS
DIRECTOR TOTAL INCOME

CLAUSE (C) EXEMPTED FOR GOVERNMENT DURING CURRENT FY OR IMMEDIATELY

COMPANY PRECEDING 2 FY
 D) NONE OF WHOSE
RELATIVE

ii) INDEBTED TO CO./H

i) HOLDS iii) HAS GIVEN GUARANTEE
/S/A OR ITS iv) HAS ANY
SHARES IN OR SECURITY FOR
PROMOTER/DIRECTOR > PECUNIARY
THE CO. INDEBTNESS OF 3RD PARTY
50 LACS IN CURRENT FY RELATIONSHIP WITH
OR IMMEDIATELY TO CO./H/S/A/PROMOTER/ CO./H/S/A
PRECEDING 2FYS DIRECTORS > 50 LACS IN AMOUNTING TO 2% OR
CURRENT FY OR MORE OF ITS GROSS
IMMEDIATELY PRECEDING 2 T/O OR TOTAL INCOME
FYS TAKEN EIHTER
INDIVIDUALLY OR
COMBINATIN WITH SUB
CLAUSES i), ii) , iii)
 e) WHO EITHER HIMSELF NOR
ANY OF HIS RELATIVE

i) HOLDS OR HAS ii) IS OR WAS iv) IS A CEO/DIRECTOR OF

HELD THE A PARTNER / iii) HOLDS 2% NPO WHICH RECEIVES
ATLEAST 25% OF ITS TOTAL
POSITION OF KMP EE / OR MORE RECEIPTS FROM
OR EMPLOUEE IN PROPRIETOR VOTING POWER CO./H/S/A/PROMOTER/DI
CO./H/S/A DURING DURING OF CO. RECTOR OR IF SUCH NPO
IMMEDIATELY HOLDS 2% OR MORE OF
IMMEDITELY TOTAL VOTING POWER OF
PRECEDING 3
PRECEDING 3 CO.
FYS
FINANCAL YAERS

IN THE FIRM OF AUDITOR OR IN A LEGAL FIRM WHOSE

CS IN PRACTICE OR COST TRANSACTIONS WITH
AUDITORS IN PRACTICE CO./H/S/A IS 10% OR
WHICH HAS CONDUCTED MORE OF ITS GROSS T/O
AUDIT OF CO./H/S/A
 F) SATISFIES SUCH OTHER CONDITIONS AS MAY BE PRESCRIBED

SHOUD HAVE KNOWLEDGE EXPERTISE & EXPERIENCE IN ONE OR MORE

FIELDS OF FINANCE, LAW, TECHNOLOGY, MARKETING, ADMINISTRATION,
ACCOUNTS , CORPORATE GOVERNANCE OR IN ANY OTHER FIELD RELATED TO
THAT COMPANY

SEC 149(7) DECLARATION BY INDEPENDENT DIRECTOR

AN INDEPENDENT DIRECTOR SHALL DECLARE HIS
INDEPENDENCE TO CO. IN 3 CASES-

IN CASE OF CHANGE OF
IN THE FIRST BM OF CO. IN CIRCUMSTANCES WHICH MAY
WHICH HE PARTICIPATES IN IN FIRST BM OF EVERY
FINANCIAL YEAR AFFECT THE STATUS OF HIS
THE CAPACITY OF DIRECTOR INDEPENDENCE, HE SHALL DECLARE
HIS INDEPENDENCE IN IMMEDIATE
NEXT BM.
 SEC 149(8) CODE OF CONDUCT OF INDEPENDENT DIRECTOR

EVERY INDEPENDENT DIRECTOR OF CO. SHALL ABIDE BY THE CODE OF

CONDUCT MENTIONED IN SCHEDULE IV OF THE COMPANIES ACT,2013

EXERCISE HIS DUTIES

UPHOLD ETHICAL MAINTAIN HIGHEST AVOID CONFLICT OF
BONAFIDELY TO BEST
STANDARDS LEVELS OF INTEGRITY INTEREST
OF INTEREST OF CO.

SEC 149(9)

AN INDEPENDENT DIRECTOR SHALL NOT BE ENTITLED TO STOCK OPTIONS

BUT CAN RECEIVE REMUNERATION BY WAY OF FEES &REMBURSEMENT OF
THE EXPENSES INCURRED BY HIM FOR ATTEDNING THE BM.
 TENURE

149(10) 149(11)
CAN BE APPOINTED NO INDEPENDENT DIRECTOR SHALL BE
FOR A TERM UPTO 5 APPOINTED FOR MORE THAN 2
CONSECUTIVE YEARS CONSECUTIVE TERMS BUT SHALL BE
ELIGIBLE FOR APPOINTMENT AFTER 3
AND YEARS HAS ELAPSED SINCE THE DATE
HE CEASED TO BECOME DIRECTOR

CAN BE RE-APPOINTED FOR

ANOTHER TERM UPTO 5 PROVIDED THAT
CONSECUTIVE YEARS BY DURING THOSE 3
PASSING SR IN GM YEARS HE SHOULD NOT
BE ASSOCIATED WITH
CO. IN ANY CAPACITY
DORECTLY OR
INDIRECTLY
 SEC 149(12)
LIABILITY OF INDEPENDENT DIRECTOR
NOTWITHSTANDING ANY PROVISION IN THIS ACT, ON INDEPENDENT DIRECTOR
OR A NON-EXECUTIVE DIRECTOR WHO IS NOT A PROMOTER OR KMP SHALL BE
LIABLE FOR ONLY-

THOSE ACTS OF OMMISSION OR

COMMISSION OF CO. WHICH HAS HE GAVE THE CONSENT OR CONNIVANCE
OCCURRED WITH HIS KNOWLEDGE & AND OR
OR
ATTRIBUTED THROUGH BOARD
PROCESS HE FAILED TO ACT DILIGENTLY

149(13)- INDEPENDENT DIRECTOR IS NOT LIABLE TO RETIRE BY

ROTATION U/S 152(6) & (7)

NOTE- 149(4) TO 149(13) SHALL NOT APPLY ON SEC 8 CO. & IFSC COMPANY.
PROVIDED THAT SEC 8 CO. SHOULD NOT HAVE DEFAULTED IN FILING FINANCIAL
STATEMENT U/S 137 OR ANNUAL RETURN U/S 92
SEC 152 APPOINTMENT OF DIRECTORS
SEC 152(1)

1ST DIRECTORS ALL THE INDIVIDUAL

SHALL BE THOSE IF ARTICLES ARE SILENT SUBSCRIBERS SHALL BE
THEN AS PER DEEMED TO BE THERE
WHOSE NAMES REGULATIONS 60 OF THE 1ST DIRECTORS
ARE TBALE F, MAJORITY OF UNLESS THE DIRECTORS
MENTIONED IN SUBSCRIBERS SHALL ARE DULY APPOINTED IN
DETERMINE THE NAMES GM
THE ARTICLES OF 1ST DIRECTORS BUT IF
THEY CANT DETERMINE
OR ARTICLES MENTION
TO NOT TO FOLLOW
TABLE F THEN-
 SEC 152

2) SAVE AS OTHERWISE 4) A PERSON

3) NO PERSON CAN PROPOSED TO BE 5) A PERSON
EXPRESSLY PROVIDED IN THIS BE APPOINTED AS A APPOINTED AS A
ACT, EVERY DIRECTOR SHALL BE APPOINTED AS A
DIRECTOR UNLESS DIRECTOR SHALL DIRECTOR SHALL
APPOINTED IN GM HE HAS BEEN NOT ACT UNLESS HE
FURNISH TO
ALLOTED DIN COMPANY GVES HIS CONSENT
TO ACT AS A
DIRECTOR IN FORM
DIR-2 & SAME IS
FILED BY CO. TO
& STATEMENT THAT ROC WITHIN 30
DIN HE IS NOT DAYSIN DIR-12
DISQUALIFIED

SEC 152(6) & (7) DEALS WITH ROTATIONAL DIRECTORS WHO

ARE SUBJECT TO RETIREMENT & THEIR REAPPOINTMENT.
(APPLICABLE ONLY ON PUBLIC CO.)
 SEC 152(6)
UNLESS THE ARTICLES PROVIDE THAT ALL DIRECTORS SHALL BE
ROTATIONAL , ATLEAST 2/3RD OF TOTAL DIRECTORS SHALL BE
ROTATIONAL DIRECTORS ( ANY FRACTION ROUND OFF TO 1 )

1/3RD OF ROTATIONAL DIRECTORS SHALL RETIRE AT EVERY AGM

STARTING FROM THE 1ST AGM (( ANY FRACTION ROUND OFF TO
NEAREST INTEGER)

THE DIRECTORS WHO SHALL RETIRE WILL BE THOSE WHO WRE THE
LONGEST IN OFFICE (FIFO METHOD) BUT IF APPOINTED ON SAME DAY
THEN RETIREMENT WILL TAKE PLACE BY AGREEMENT BETWEEN THEM
& IN ITS ABSENCE BY LOTTERY.
 SEC 152(6)
ROTATIONAL MIN 2/3RD * TOTAL APPOINTED BY OR IN
DIRECTORS DIRECTORS GM
NON-ROTATIONAL MAXIMUM 1/3RD APPOINTED IN THE
DIRECTOR MANNER PROVIDED
IN ARTICLES WHICH IF
SILENT THE BY OR IN
GM

EXAMPLE- TOTAL DIRECTOR * 2/3 = ROTATIONAL DIRECTOR * 1/3 = RETIRE

i) 9 * 2/3 = 6 * 1/3 =2
ii) 10 * 2/3 = 6.67(7) = 2.33 (2)
iii) 11 * 2/3 = 7.33(8) * 1/3 = 2.67 (3)
 152(7)

IF THE VACANCY OF RETIRING DIRECTOR IS NOT FILLED UP IN

AGM AND IT HAS NOT BEEN RESOLVED (DECIDED) TO NOT
TO FILL THE VACANCY THEN
AGM SHALL BE ADJOURNED TO SAME DAY,TIME, & PLACE IN
NEXT WEEK OR IF THAT DAY IS A NATIONAL HOLIDAY THEN
TO SUCCEEDING DAY WHICH IS NOT A NATIONAL HOLIDAY
 152(7)
IF AT THE ADJOUNED AGM ALSO THE VACANCY IS NOT FILLED UP & ITS NOT RESOLVED TO
NOT TO FILL THE VACANCY THEN RETIRING DIRECTORS SHALL BE AUTOMATICALLY RE-
APPOINTED EXCEPT IN FOLLOWING CASES-

4) SOME
RESOLUTION IS
2) HE EXPRESSED HIS REQUIRED TO
1) HE IS 3)HIS RESOLUTION 5) WHEN SEC 162 IS
UNWILLINGNESS TO APPOINT HIM AS
DISQUALIFIED PUT & LOST APPLICABLE
BE RE-APPOINTED PER ANY LAW FOR
THE TIME BEING IN
FORCE

SEC 152(5) DOES NOT APPLY ON SEC 8 CO.

SEC 152(5) DOES NOT APPLY ON GOVT CO. IF DIRECTORS APPOINTED BY CG/SG
152(6) & (7) SEC 152(5) DOES NOT APPLY ON IFSC PUBLIC CO.
152(6) & (7) SEC 152(5) DOES NOT APPLY ON UNLISTED GOVT CO & ITS SUBSIDIARIES
SEC 160- RIGHT OF A PERSON TO STAND FOR DIRECTORSHIP
OTHER THAN RETIRING DIRECTOR
ANY PERSON OTHER THAN RETIRING DIRECTOR MAY SUBMIT A WRITTEN
NOTICE AT CO.’S RO PROPOSING HIS CANDIDATURE AS A DIRECTOR

MEMBER CAN SUBMIT HIS OWN CANDIDATURE OR PROPOSE ANY OTHER

PERSON’S CANDIDATURE

SUCH WRITTEN NOTICE SHALL BE SUBMITTED AT CO.’S RO ALONG WITH A

SUM OF RS.1 LAKH ATLEAST 14 DAYS BEFORE ANY GM OF CO.

RS. 1LAKH NOT REQUIRED TO BE DEPOSITED IN CASE OF-

INDEPENDENT NAME PROPOSED NAME PROPOSE BY

DIRECTOR BY NRC U/S 178 BOD IF NRC DOES
NOT EXIST
SEC 160- RIGHT OF A PERSON TO STAND FOR DIRECTORSHIP
OTHER THAN RETIRING DIRECTOR

CO. SHALL ATLEAST 7 DAYS BEFORE THE GM INFORM

ALL ITS MEMBERS BY

SENDING INDIVIDUAL PUBLISH ADVERTISEMENT IN

NOTICES TO MEMBERS BY 2 NEWSPAPER
E-MAIL OR POST
VERNACULAR
ENGLISH LANGUAGE
LANGUAGE IN
IN ENGLISH
VERNACULAR
NEWSPAPER
NEWSPAPER

BOTH HAVING WIDE CIRCULATION IN THE DISTRICT

WHERE CO.’S RO IS SITUATED .
ALSO IT SHALL BE PUBLISHED ON CO.’S WEBISTE IF ANY.
SEC 160- RIGHT OF A PERSON TO STAND FOR DIRECTORSHIP
OTHER THAN RETIRING DIRECTOR

IF THE PERSON GETS ELECTED AS A DIRECTOR OR MORE THAN 25%

VOTES RECEIVED IN HIS FAVOUR THEN 1 LAC SHALL BE REFUNDED.

SEC 160 DOES NOT APPLY ON-

SUBSDIARY OF
WHOLLY OWNED
PRIVATE CO. SEC 8 CO. IFSC PUBLIC CO. WHOLLY OWNED
GOVT CO.
GOVT CO.
100% PUSC OF
GOVT CO. IS
HELD BY
CG/SG/BOTH

NIDHI CO.- RS 1 LAC SUBSTITUTED BY RS.10000

 SEC 161
BASIS ADDITIONAL DIRECTOR ALTERNATE DIRECTOR NOMINEE DIRECTOR CASUAL VACANCY
DIRECTOR
SECTION 161(1) 161(2) 161(3 161(4)
APPLICABILITY ALL COMPANY ALL COMPANY ALL COMPANY ALL COMPANY
RESOLUTION BR AT BM BR AT BM BR AT BM BR AT BM
PURPOSE TO MANAGE THE INCREASE BECAUSE ORIGINAL AS PER AGREEMENT WITH BECAUSE DIRECTORS
WORKLOAD DIRECTOR IS GOING OUT OF BANKS OR FINANCIAL APPOINTED IN GM VACATES
INDIA FOR 3 MONTHS OR INSTITUTIONS HIS OFFLINE BEFORE EXPIRY
MORE OF HIS TENURE
PRE-CONDITION ARTICLES MUST AUTHORISE ARTICLES MUST AUTHORISE SUBJECT TO ARTICLES SUBJECT TO ARTICLES
or, OR IN GM
TENURE NEXT AGM’S DUE DATE OR TILL THE TIME PERMISSIBLE AS PER AGREEMENT REMAINING TENURE OF THE
ACTUAL DATE WHICHEVER IS TO ORIGINAL DIRECTOR OR DIRECTOR WHOSE CASUAL
EARLIER IF ORIGINAL DIRECTOR VACANCY HAS BEEN FILLED
RETURNS TO INDIA UP

SPECIAL POINTS THE DIRECTOR WHO WAS A) EXISTING DIRECTOR IT’S A NEW SECTION & WAS HAS TO BE RATIFIED IN NEXT
REJECTED IN GM CANNOT OF CO. CANNOT BE NOT THERE IN PREVIOUS GM
BE APPOINTED AS APPOINTED AS COMPANIES ACT
ADDITIONAL DIRECTOR ALTERNATE DIRECTOR
B) INDEPENDENT
DIRECTOR’S
ALTERNATE DIRECTOR
MUST ALSO BE
INDEPENDENT
C) AUTOMATE
APPOINTMENT U/S
152(7) SHALL APPLY
TO ORIGINAL
DIRECTOR & NOT TO
ALTERNATE
DIRECTOR.
 MEPL’S AGM DUE DATE 30/09.21 BUT WAS HELD ON
A) 15.9.21
B) 15.10,21
TILL WHAT TIME ITS ADDITIONAL DIRECTOR WILL HOLD THE OFFICE

TILL NEXT AGM’S DUE DATE OR ACTUAL DATE, WHICHEVER IS EARLIER

A) 30.0.21 OR 15.09.21 = 15.9.21

B) 30.9.21 OR 15.10.21 = 30.9.21
CO. WANTS TO APPOINT ADDITIONAL DIRECTOR BUT ITS ARTICLES ARE SILENT
ARTICLES

FOLLOW REGULATION 66 OF TABLE F AS PER WHICH CO. MAY APPOINT

ADDITONAL DIRECTOR BY PASSING BR AT BM.

HOWEVER, IF ARTICLES MENTION TO NOT TO FOLLOW TABLE F THEN WE CANT

FOLLOW TABLE F.

STILL IF CO. WANTS TO APPOINT ADDITONAL DIRECTOR , THEN ALTER THE

ARTICLES BY PASSING SR IN GM & THEN APPOINT ADDITIONAL DIRECTOR BY
BR AT BM.
CO. WANTS TO APPOINT ALTERNATE DIRECTOR BUT ARTICLES
ARE SILENT

2 OPTIONS

ALTER THE ARTICLES BY PASSING

SR IN GM & THEN IN FUTURE IF CO. DO NOT WANT TO ALTER THE
ONLY BR AT BM SHALL BE ARTICLES THEN EVERYTIME
REQUIRED TO APPOINT AUTHORISATION OF SHAREHOLDERS
ALTERNATE DIRECTOR BY PASSING OR IN GM SHALL BE
REQUIRED & THEN PASS BR AT BM
ADDITONAL DIRECTOR (MR.A) DIES BEFORE AGM

CAN HIS CASUAL VACANCY BE FILLED UP U/S 161(4)?

NO BECAUSE A WAS APPOINTED IN BM & CASUAL VACANCY U/S 161(4) CAN BE

FILLED UP INLY FOR DIRECTORS APPOINTED IN GM WHO VACATES OFFICE BEFORE
THEIR NORMAL EXPIRY PERIOD OF TENURE.
A DIES B DIES C
AFTER 1 YEAR AFTER 1 YEAR

A WAS APPOINTED IN GM AS A DIRECTOR FOR 5 YEARS.

CAN B BE APPOINTED U/S 161(4)? - YES FOR NEXT 4 YEARS
CAN C BE APPOINTED U/S 161(4)? - NO
 SEC 162
APPOINTMENT OF DIRECTORS TO BE VOTED
INDIVIDUALLY
EACH DIRECTOR TO BE 2 OR MORE DIRECTORS CANNOT BE
APPOINTED INDIVIDUALLY BY APPOINTED BY A SINGLE
PASSING SEPARATE RESOLUTION UNLESS THE MOTION
RESOLUTION (PROPOSAL) TO APPOINT 2 OR
MORE DIRECTORS BY A SINGLE
RESOLUTION HAS BEEN FIRST
APPROVED BY SHAREHOLDERS IN
WHICH NO SHAREHOLDER VOTED
AGAINST
ANY RESOLUTION PASSSED IN
CONTRAVENTION OF
PROVISIONS OD SEC 162 SHALL
BE VOID
NOT APPLICABLE ON
A) WHOLLY OWNED GOVT CO.
& ITS SUBSIDIARY
B) PRIVATE CO.
C) IFSC PUBLIC CO.
 SEC 163 APPOINTMENT OF DIRECTORS BY
PROPORTIONAL REPRESENTATION (PR)

APPOINTMENT OF DIRECTORS NOT APPLICABLE ON

IT PROTECTS BY PR CAN TAKE PLACE IF TENURE MAX 3 WHOLLY OWNED
MINORITY ARTICLES PROVIDE THAT GOVT CO. & ITS
SHAREHOLDER’S ATLEAST 2/3RD OF TOTAL
YEAR & ANY
CASUAL VACANCY SUBSIDIARY
RIGHTS DIRECTORS SHALL BE
APPOINTED BY WAY OF PR OF TO BE FILLED UP
SHAREHOLDERS EITHER BY U/S 161(4)
INDIVIDUAL VOTES OR
CUMULATIVE VOTING

E.G- MEPL HAVING TOTAL 12 DIRECTORS HAS 2 SHAREHOLDERS A-75%

SHARES, B- 25% SHARES. ARTICLES PROVIDE ALL DIRECTORS TO BE
APPOINTED BY PR.
THIS MEANS –
A SHALL APPOINT 12 DIR * 75/100 = 9 DIR
B SHALL APPOINT 12 DIR * 25/100 = 3 DIR
SEC 164 DISQUALIFICATION OF DIRECTORS

a. HE IS OF UNSOUND MIND

b. HE IS AN UNDISCHARGED INSOLVENT

c. HE HAS APPLIED TO A COURT FOR BEING ABJUDICATED AS

INSOLVENT BUT HIS APPLICATION IS PENDING

d. HE IS CONVICTED OF AN OFFENCE INVOLVING MORAL

TURPITUDE OR OTHERWISE AND SENTENCED TO IMPRISONMENT

FOR MIN 6 MONTHS FOR MIN 7 YEARS-

DISQUALIFIED FOR – 5 YEARS DISQUALIFIED FOR LIFETIME
FROM EXPIRY OF SENTENCE
 SEC
SEC 164
164 DIS
DISQUALIFICATION
QUALIFICATION OF
OF DIRECTORS
DIRECTORS
e.COURT OR TRIBUNAL HAS PASSED ANY ORDER AGAINST HIM &
DISQUALIFIED HIM FROM BECOMING DIRECTOR

f. HAS NOT PAID CALLS IN ARREAR AND 6 MONTHS HAVE PASSED

FROM DUE DATE OF PAYMENT OF SUCH CALL

g. HE HAS BEEN CONVICTED OF ANY OFFENCE RELATED TO RELATED

PARTY TRANSACTION U/S 188 IN PRECEDING 5 FINANCIAL YEARS

h. FAILS TO COMPLY 152(3) – I.E, NOT HAVING DIN

i.FAILS TO COMPLY 165(1) – I.E, CEILING LIMIT ON DIRECTORSHIP

PROVIDED THAT THE DISQUALIFICATION REFEREED IN CLAUSES (D), (E) , (G),

SHALL CONTINUE TO APPLY EVEN IF THE PERSON HAS FILED AN APPEAL
AGAINST SUCH ORDER OF CONVICTION OR DISQUALIFICATION
 SECTION 164(2)
NO PERSON WHO IS OR HAS BEEN A DIRECTOR OF A CO. WHICH

B. FAILED TO REPAY THE DEPOSITS OR

A. HAS NOT FILED FINANCIAL
STATEMENTS OR ANNUAL
RETURNS FOR CONTINUOUS
PERIOD OF 3 FYS
INTEREST THEREON ON DUE DATE OR
FAILED TO REDEEM DEBENTURES OR
OR INTEREST THEREON, ON DUE DATE OR
FAILED TO PAY THE DECLARED DIVIDEND
& SUCH FAILURE CONTINUED FOR 1 YEAR
OR MORE

SHALL BE ELIGIBLE TO BE RE-APPOINTED AS DIRECTOR IN THAT CO. OR APPOINTED AS DIRECTOR IN

ANY OTHER CO. FOR 5 YEARS FROM SUCH DEFAULT.

PROVIDED THAT IF A PERSON IF APPOINTED AS A DIRECTOR OF A CO. WHICH HS DEFAULTED

CLAUSE (a) OR (b) THEN NO DISQUALIFICATION SHALL ATTRACT ON HIM FOR6 MONTHS FROM HIS
APPOINTMENT
 E.G- X LTD HAVING DIRECTORS A,B,C FAILED TO SUBMIT FINANCIAL STATEMENTS TO ROC
FOR CONTUNUOUS 3FY. A IS ALSOA DIRECTOR IN A LTD. B IS ALSO DIRECTOR IN B LTD. C IS
ALSO DIRECTOR IN C LTD. ADVSE ON FOLLOWING-

CAN THEY BE RE-APPOINTED IN X LTD IF

WILL A,B,C HAVE TO VACATE
THEIR TERM ENDS WITHIN 5 YEARS
FROM X LTD?
FROM DEFAULT OF CO.?
NO
NO

WILL A,B,C HAVE TO VACATE

CAN A NEW CO. D LTD APPOINTED AS
FROM OTHER COMPANIES A
DIRECTORS FOR 5 YEARS FROM THE DATE
LTD, B LTD, C LTD IN WHICH
OF DEFAULT OF X LTD??
THEY ARE DIRECTORS?
NO THEY CANT BE APPOINTED AS
YES
DIRECTORS FOR 5 YEARS FROM THE
DATE OF DEFAULT OF X LTD.
SEC 164(3)- PRIVATE CO. MAY BY ITS ARTICLES PROVIDE
FOR ADDITIONAL GROUNDS OF DISQUALIFICATION
IS QUALIFICATION SHARES MANDATORY TO BE HELD BY DIRECTORS?

QUALIFICATION SHARES REFER TO THE MIN NO. OF SHARES WHICH A PERSON MUST HOLD IN
THE CO. IF HE WANTS TO BECOME DIRECTOR OF THAT COMPANY.

THERE IS NO SEPARATE SECTION OR PROVISION IN THE COMPANIE ACT,2013 MANDATING THE

REQUIREMENT OF QUALIFICATION SHARES.

HOWEVER BY VIRTUE OF SEC 164(3) PRIVATE CO. MAY PROVIDE ANY ADDITIONAL GROUNDS
OF DISQUALIFICATIONS OF DIRECTOR WHICH CAN INCLUDE THE MANDATORY HOLDING OF
QUALIFICATION SHARES.

TO SUM UP, QUALIFICATION SHARES TO BE HELD BY DIRECTOR-

PRIVATE CO
PUBLIC CO POSSIBLE IF
NOT POSSIBLE. MENTIONED IN
ITS ARTICLES.
 SEC 167 VARIATION OF THE OFFICE OF DIRECTOR

THE OFFICE OF DIRECTOR SHALL BECOME

VACANT IN THE FOLLOWING CASES-

COURT/ CONVICTED
HE INCURRS HE ABSENTS FAILS TO BY COURT OF REMOVED IN HE CEASE TO HOLD
HIMSELF IN ALL BM CONTRAVENE DISCLOSE TRIBUNAL THE OFFICE/
DISQUALIFICATIO PASSES ORDER ANY OFFENCE PURSUNACE
IN LAST 12 MONTHS S SEC 184 & INTEREST U/S INVOLVING OF THIS ACT
N U/S 164 WHETHER WITH OR ENTERS 182 DISQUALIFYING EMPLOYMENT IN
PROVIDED THAT WITHOUT LEAVE OF CONTRACTS HIM AS MORAL HOLDING/
IF DISQUALIFIED DIRECTOR TURPITUDE
ABSENCE IN WHICH HE OR SUBSIDIARY /
U/S 164(2) THEN IS DIRECTLY OTHERWISE & ASSOCIATE OF CO.
HE SHALL VACATE OR SENTENCED BECAUSE OF
FROM ALL CO. INDIRECTLY TO WHICH HE WAS
EXCEPT THE INTERESTED IMPRISONME APPOINTED AS
DEFAULTING CO. N MIN 6 DIRECTOR IN THE
MONTHS CO.
 SEC 167

2)
IF A PERSON
3)
CONTINUES AS A 4)
DIRECTOR
PRIVATE CO. MAY IN
KNOWINGLY THAT IF ALL DIRECTORS HAVE ITS ARTICLES
HIS OFFICE HAS VACATED FROM CO. THEN MIN PROVIDE
GOT VACATED NO. OF DIRECTORS SHALL BE ADDITIONAL
THEN APPOINTED BY PROMOTERS & GROUNDS OF
IN THEIR ABSENCE BY CG VACATION
UNTIL DIRECTORS ARE
MIN FINE – 1 LAC APPOINTED IN GM

MAX FINE- 5 LAC

 SEC 165 NUMBER OF DIRECTORSHIP

1) NO PERSON SHALL HOLD DIRECTORSHIP INCUDING

ALTERNATE DIRECTOR IN MORE THAN 20 COMPANIES
SIMALTANEOUSLY.

PROVIDED THAT MAX NO. OF PUBLIC CO. IN WHICH A PERSON

CAN HOLD DIRECTORSHIP SHALL NOT EXCEED 10. ALSO IN THIS
LIMIT OF 10 , ANY PRIVATE CO.WHICH IS EITHER HOLDING OR
SUBSIDIARY OF PUBLIC CO. WILL BE RECKONED.
 SEC 165 NUMBER OF DIRECTORSHIP

DIRECTORSHIP IN DORMANT CO. & SEC 8 CO. NOT BE

COUNTED WITHIN THE ABOVE SPECIFIED LIMITS OF 20 & 10.

2) MEMBERS BY PASSING SR IN GM MAY PROVIDE FOR

LESSER NO. OF COMPANIES IN WHICH DIRECTORS OF
THE CO. MAY HOLD DIRECTORSHIP
 TRANSITIONAL PROVISIONS

3) ANY PERSON HOLDING DIRECTORSHIP IN MORE 5) NO PERSON SHALL ACT AS A

THAN SPECIFIED LIMITS BEFORE THE DIRECTOR IN MORE THAN
COMMENCEMENT OF THIS ACT SHALL WIHTIN 1 SPECIFIED LIMITS AFTER
YEAR FROM COMMENCEMENT OF THIS ACT- RESIGNATION OR 1 YEAR FROM
COMMENCEMENT OF THIS ACT.
CHOOSE THE INTIMATE ALL WHICHEVER IS EARLIER
CO. WITHIN COMPANIES & ROC
SPECIFIED LIMIT
4) ANY RESIGNATION SHALL BE
RESIGN FROM EFFECTIVE IMMEDIATELY ON THE
OTHER CO. DESPATCH OF SUCH RESIGNATION
6) ANY PERSON WHO ACCEPTS DIRECTORSHIP IN MORE THAN THE
SPECIFIED LIMITS SHALL BE LIABLE TO PENALTY OF 20,000/DAY TILL
THE DEFAULT CONTINUES BUT SUBJECT TO MAX 2 LACS
 SEC 166 DUTIES OF DIRECTOR

b) HE SHALL ACT IN D)HE SHALL NOT e)HE SHALL NOT

GOOD FAITH TO GET INVOLVED ACHIEVE OR
PROMOTE THE OBJECT IN MATTERS ATTEMPT ANY
OF CO. TO PROMOTE WHICH UNDUE
MEMBERS INTEREST AS A INVOLVES
C)HE SHALL EXERCISE GAIN/ADVANYTAGE
a) SUBJECT TO THE WHOLE & IN THE BEST OF CONFLICT OF
REASONABLE SKILL & FOR HIMSELF OR HIS
PROVISIONS OF THE INTEREST OF CO., ITS INTEREST
CARE AND DUE RELATIVE OR E)HE SHALL NOT
ACT, A DIRECTOR SHAREHOLDERS , ITS BETWEEN CO.’S
DILIGENCE AND PARTNER & ANY ASSIGN HIS
SHALL ACT IN EMLOYEES COMMUNITY INTEREST & HIS
EXERCISE UNDUE GAIN SO OFFICE
& ENV OWN
ACCORDANCE WITH INDEPENDENT ACHEVED SHALL BE
THE ARTICLES OF CO. JUDGEMENT DIRECT/INDIRECT PAID BACK TO CO.
INTEREST.

AS PER SEC 166(7) IF ANY CONTRAVENTION IS MADE OF ANY OF THE ABOVE

PROVISIONS THEN FINE MIN- 1 LAC, MAX – 5 LACS
 SEC 168 RESIGNATION OF DIRECTORS

1) A DIRECTOR MAY RESIGN FROM CO. BY GIVING A

WRITTEN NOTICE OF RESIGNATION TO CO. & CO.
WITHIN 30 DAYS ON RECEIPT OF SUCH RESIGNATION 3)IF ALL THE DIRECTORS RESIGN OR
SHALL INFORM ROC BY SUBMITTING FORM DIR-12 VACATE THEN MIN NO. OF DIRECTORS
& ALSO PUT ONWEBISTE OF CO. IF ANY & MENTION SHALL BE APPOINTED BY PROMOTERS
IN DIRECTOR’S REPORT. OR IN THEIR ABSENCE BY CG TILL THE
APPOINTMENT IS MADE IN GM
PROVIDED THAT DIRECTOR MAY WITHIN 30 DAYS OF
RESIGNATION INFORM ROC IN FORM DIR-11
DETAILED REASONS OF RESGINATON

2) THE RESIGNATION SHALL BE EFFECTIVE FROM THE

DATE OF RECEIPT OF SUCH RESIGNATION BY CO. OR IF
ANY DATE IS MENTIONED IN SUCH RESIGNATION NOTICE.
WHICHEVER IS LATER

PROVIDED THAT EVEN AFTER RESIGNATION DIRECTOR

SHALL BE LIABLE FOR OFFENCES DURING HIS TENURE
 SEC 169 REMOVAL OF DIRECTORS
1) A CO. MAY BY PASSING OR IN GM REMOVE A DIRECTOR OTHER THAN

DIRECTOR APPOINTED BY WAY

DIRECTORS APPOINTED BY NCLT OF PROPORTIONAL
U/S 242 REPRESENTATION U/S 163

PROVIDED THAT AN INDEPENDENT DIRECTOR FOR 2ND TERM CAN BE

REMOVED BY PASSING SR IN GM (INSTEAD OF OR IN GM)

CO. SHALL GIVE OPPORTUNITY OF BEING HEARD TO A DIRECTOR BEING

REMOVED
 CONCEPT OF SPECIAL NOTICE TO REMOVE A DIRECTOR

MEMBER(S)
HOLDING ATLEAST
1% * VOTING
POWER OR PAID COMPANY
UP SHARES
GENERAL MEETING
ATLEAST RS.5 LACS
U/S 115 BY PASSING OR, THE
DIRECTOR CAN BE
REMOVED

DIRECTORS

MAY SEND A WRITTEN REPRESENTATION TO CIRCULATE TO ALL MEMBERS. CO. IF FEELS ITS NOT POSSIBLE TO CIRCULATE
THEN IT SHALL READ IN GM . IF CO. FEELS DIRECTOR IS DOING IT FOR DEFAMATION OR NEEDLESS PUBLICITY THEN AFTER
NCLT’S APPROVAL CO. MAY NOT SEND OR READ SUCH READ SUCH REPRESENTATION OF DIRECTOR.
 THE VACANCY CAUSED BY REMOVAL OF DIRECTOR SHALL BE FILLED UP BY

APPOINTING NEW PERSON AS A CASUAL VACANCY U/S 161(4)

DIRECTOR IN THE SAME GM PROVIDED
THAT HIS APPOINTMENT SPECIAL NOTICE
WAS GIVEN

DIRECTOR SO REMOVED IF ENTITLED TO ANY COMPENSATION

FOR HIS PREMATURE TERMINATION SHALL BE GIVEN
NOTHING IN THIS SECTION TAKES AWAY THE POWER VESTED IN
OTHER SECTIONS TO REMOVE THE DIRECTOR

DIRECTOR REMOVED U/S 169 CANNOT BE APPOINTED BY BOARD

 SEC 170 REGISTER OF DIRECTORS & KMP

1)EVERY CO. SHALL MAINTAIN REGISTER OF 2) EVERY CO. SHALL WITHIN 30

ITS DIRECTORS & KMP AT REGISTERED DAYS OF APPOINTMENT OR
OFFICE OF CO. CONTAINING FOLLOWING ANY CHANGE IN DIRECTOR /
DETAILS (RULE 7) KMP INFORM ROC BY
SUBMITTING DIR-12
PRESENT ADDRESS &
DIN(OPTIONAL
PERMANANET
FOR KMP)
ADDRESS

PRESENT FULL NATIONALITY

NAME INCLUDING
SURNAME DATE OF
CESSATION
FORMER FULL NAME
INCLUDING SURNAME PAN
DATE OF
DATE OF BECOMING
BIRTH DIR/KMP
SEC 170 DOES NOT APPLY ON GOVERNMENT CO. WHOSE 100%
SHARES ARE HELD BY CG OR SG OR BOTH.

ALSO IN CASE OF IFSC COMPANIES DIR-12 MAY BE

SUBMITTED WITHIN 60 DAYS INSTEAD OF 30 DAYS

REGISTER SHALL ALSO CONTAIN DETAILS OF SECURITIES

HELD, TRANSFERRED BY DIR/KMP IN THE CO./H/S/A
FELLOW SUBSIDIARY
SEC 171 INSPECTION OF REGISTER OF DIR/KMP

1)ANY MEMBER CAN INSPECT

REGISTER OF DIR/KMP DURING
BUSINESS HOURS, TAKE EXTRACTS
& REQUEST A COPY OF IT FREE OF
COST. CO. SHALL PROVIDE SUCH
COPY WITHIN 30 DAYS OF RECEIPT
OF REQUEST. ALSO IT SHALL KEPT
OPEN FOR INSPECTION AT AGM
2)IF INSPECTION IS NOT ALLOWED
OR COPY REQUESTED IS NOT GIVEN
TO MEMBER WITHIN 30 DAYS THEN
ROC ON AN APPLICATION MADE TO
IT CAN ORDER CO. IMMEDIATE
INSPECTION OR DESPATCH OF COPY.
SEC 172 PUNISHMENT FOR CONTRAVENTION FOR WHICH NO
SPECIFIC PUNISHMENT OR PENALY IS PROVIDED IN THIS
CHAPTER

COMPANY
OFFICER IN DEFAULT
PENALTY 50000
+
500/DAY BUT PENALTY 50000
SUBJECT TO MAX 3 LACS +
500/DAY BUT
SUBJECT TO MAX 1 LACS
SEC 150- MANNER OF SELECTION OF INDEPENDENT DIRECTOR &
MAINTENANCE OF DATABANK OF INDEPENDENT DIRECTORS

1) AN INDEPENDENT DIRECTOR MAY BE SELECTED FROM

DATABANK CONTAINING

NAME QUALIFICATION

ADDRESS

OF THE PERSONS WHO ARE ELIGIBLE & WILLING TO BE APPOINTED AS

INDEPENDENT DIRECTOR , MAINTAINED BY A BODY OR INSTITUTE OR
ASSOCIATION NOTIFIED BY CG. (INDIAN INSTITUTE OF CORPORATE AFFAIRS
LOCATED AT MANESAR HAS BEEN NOTIFIED BY CG.)
PROVIDED THAT THE RESPONISIBILITY TO EXERCISE DUE DILIGENCE
BEFORE APPOINTING AN INDEPENDENT DIRECTOR SHALL LIE ON
CO.
2) INDEPENDENT DIRECTOR APPOINTMENT SHALL APPROVED BY
PASSING A RESOLUTION IN GM AND ITS EXPLANATORY
STATEMENT SHALL CONTAIN JUSTIFICATION FOR THE
APPOINTMENT

3) CG SHALL PRESCRIBE THE RULES (RULE 6) RELATED TO

DATABASE OF INDEPENDENT DIRECTOR

NOTE- SEC 150 SHALL NOT APPLY ON SEC 8 CO.

 COMPLIANCES REQUIRED A PERSON ELIGIBLE & WILLING TO ACT
AS INDEPENDENT DIRECTOR

1) EVERY INDIVIDUAL
WHO IS AN INDEPENDENT WHO IS WILLING TO BECOME
DIRECTOR SHALL WITHIN 13 AN INDEPENDENT DIRECTOR
OR
MONTHS OR FROM 1.12.19 IN ANY CO. AFTER 1.12.19

SHALL APPLY ONLINE TO THE INSTITUTE (INDIAN INSTITUTE OF

CORPORATE AFFAIRS) TO GET HIS NAME INCLUDED IN THE
DATABANK OF INDEPENDENT DIRECTOR FOR 1 YEAR OR 5 YEAR
OR LIFETIME
PROVIDED THAT INDIVIDUAL NOT HOLDING DIN MAY ALSO APPLY

2) ON EXPIRY OF ENROLLED PERIOD OF 1 YEAR OR 5 YEAR FOR

WHICH A PERSON REGISTRED HIS NAME IN DATABANK OF
INDPENDENT DIRECTOR THEN WITHIN 30 DAYS FROM THE EXPIRY
OF ENROLLED PERIOD, THE PERSON SHALL FILE AN APPLICATION
FOR REMOVAL FOR EITHER 1 YEAR OR 5 YEAR OR LIFETIME.
PROVIDED THAT NO REMOVAL APPLICATION IS READ IF
ENROLLED FOR LIFETIME
3) EVERY INDEPENDENT DIRECTOR SHALL SUBMIT DECLARATION
TO BOARD ABOUT COMPLIANCE OF THIS RULE

4) EVERY PERSON WHOSE NAME IS INCLUDED IN

DATABANK OF INDEPENDENT DIRECTOR SHALL WITHIN 2
YEARS FROMSUCH INCLUSION PASS AN ONLINE
PROFICIENCY SELF ASSESSMENT TEST( PASSING % IS 50%
OF TOTAL MARKS & THERE IS NO LIMIT ON NO. OF
ATTEMPTS)
 FOLLOWING ARE EXEMPTED FROM THE TEST

A PERSON HAVING EXPERIENCE AS A DIR/KMP

FOR ATLEAST 3 YEARS IN

IN THE PAY SCALE OF

STATUTORY COPORATION
LISTED UNDER SPECIAL ACT OF
IN THE PAY SCALE OF DIRECTOR CHIEF GENERAL
PUBLIC CO. PARLIAMENT OR STATE OR ABOVE IN MANAGER OR ABOVE IN
LEGISLATURE & INVOLVED IN
COMMERCIAL ACTIVITY MINISTRY
OF
UNLISTED FINANCE RBI PFRDA
PUBLIC CO. BODY CORPORATE
HAVING PUSC INCORPORATED
MIN 10 CR OUTSIDE INDIA MINISTRY OF HEAVY
HAVING PUSC MIN $2 INDUSTRIES & PUBLIC SEBI IRDA
MILLION
ENTERPRISES

BODY CORPORATE ON ANY RSE OR INA MINISTRY OF

COUNTRY WHICH IS MEMBER OF FINANCIAL
COMMERCE &
ACTION TASK FORCEON MONEY LAUNDERING
& ITS SECURITIES MARKET REGULATOR IS A INDUSTRY
MEMBER OF IOSCO (INTERNATIONAL
ORGANISATION OF SECURITIES COMMISSION) MCA
 SEC 151 SMALL SHAREHOLDER’S DIRECTOR
(APPLICABLE ONLY ON LISTED CO.)

SMALL SHAREHOLDER MEANS A SHAREHOLDER HOLDING

SHARES (EQUITY, PREFERENCE) UPTO FACE VALUE RS.20,000

EXAMPLE 1-MR.X HOLDING 2000 EQUITY SHARE CAPITAL RS.10 EACH & 1000
PREFERENCE SHARES OF RS.10 EACH IS NOT A SMALL SHAREHOLDER AS HIS
FACE VALUE OF SHARES EXCEED RS.20,000

EXAMPLE 2-MR.Y HOLDING 3000 EQUITY SHARE CAPITAL RS.10 EACH, CALLED
UP & PAID UP RS.6 EACH IS NOT A SMALL SHAREHOLDER AS FACE VALUE
EXCEEDS RS.20,000
 RULE 7- A LISTED CO. MAY APPOINT A SMALL SHAREHOLDER DIRECTOR

ON APPLICATION MADE BY
SUO-MOTO OR ATLEAST 1000 SMALL
SHAREHOLDERS OR 1/10TH OF
SMALL SHAREHOLDERS
WHICHEVER IS LOWER

SUCH APPLICATION PROPOSING A CANDIDATURE OF SMALL SHAREHOLDER

DIRECTOR BE SUBMITTED ATLEAST 14 DAYS BEFORE THE GM ALONG WITH
SHARE FOLIO
NAME ADDRESS
HELD NO.
OF THE PERSON BEING PROPOSED AS SMALL SHAREHOLDER DIRECTOR & ALSO OF
THE SMALL SHAREHOLDER WHO ARE PROPOSING. PROVIDED THAT IF THE PERSON
BEING PROPOSED AS SMALL SHAREHOLDER DIRECTOR DOES NOT HOLD SHARES,
THEN HIS SHARE HELD & FOLIO NO. IS NOT REQUIRED.
 SUCH APPLICATION SHALL ALSO CONTAIN

DIN STATEMENT CONSENT TO ACT AS

THAT HE IS NOT DIRECTOR IN FORM
DISQUALIFIED DIR-2

TENURE – MAXIMUM 3 CONSECUTIVE YEAR.

RE-APPOINTMENT.
NOT ALLOWED. COOLING PERIOD OF 3 YEARS IN WHICH HE CANNOT BE
ASSOCIATED WITH THE CO. DIRECTLY OR INDIRECTLY .

WHETHER CONSIDERED AS INDEPENDENT DIRECTOR- YES, IF HE MEETS CRITERIA

OF 149(6) & DECLARE HIS INDEPENDENCE UNDER 149(7)
 VACATION OF OFFICE

IF SEC 164 OR 167 IS ATTRACTED OR IF HE CEASES TO MEET THE

CRITERIA OF INDEPENDENT DIRECTOR

LIABLE TO RETIRE BY ROTATION? – N0

MAXIMUM NO. OF COMPANIES

A PERSON CAN BECOME SMALL SHAREHOLDER DIERECTOR IN MAX 2

COMPANIES AT THE SAME TIME PROVIDED THAT THE 2ND CO. IS NOT IN
COMPETITION OR CONFLICT OF INTEREST.