Directors Comprehensive Concept Book

Directors | Comprehensive Concepts Book CA Siddhesh Valimbe
INDEX: AppoINtmENt & QuAlIfIcAtIoN of

DIrEctors (chAptEr XI)
Particulars Section No. Page

No.
Meaning of a ‘Director’ & ‘Board of Directors’ 2(34) and 2(10) 2
Company to have a Board of Directors (Min. & Max.) 149(1) 2
Disqualifications for Appointment of Directors 164 3
Vacation of Office of Director 167 4
Number of Directorships 165 5
Woman Director 2nd Proviso to 149(1) 6
Resident Director 149(3) 6
Independent Director 149(4) 7
Criteria for Independent Director 149(6) 8
Manner of selection of ID & Data Bank 150 11
Duties of Directors 166 12
Appointment of Directors (First & Subsequent) 152(1), (2) 13
General Provisions relating to appointment of 152(3) to 152(5) 13
directors (declaration, consent..)
Provisions of DIN 152(3) and 153 to 159 14
Rotation & Retirement of Directors 152(6) 16
Deemed Reappointment 152(7) 17
Right of persons other than “Retiring Directors” to 160 18
stand for directorship
Small Shareholders’ Director 151 19
Additional Director 161(1) 20
Alternate Director 161(2) 20
Casual Vacancy 161(4) 20
Nominee Director 161(3) 21
Proportional Representation 163 21
Appointment of Directors to be voted on Individually 162 22
Resignation of Directors 168 23
Removal of Directors 169 24
Register of Directors, KMP & their Shareholding 170 26
Members’ right to inspect 171 26
Punishment (Residual) 172 26
P a g e 1 | 29
Chapter 1: Appointment & Qualification of Directors (Chapter XI of the Companies

Act, 2013: Sections 149-172 and the Companies (Appointment & Qualification of
Directors) Rules, 2014)
Basic Meaning of Certain Terms (Introduction)
Why do we need a Board of Directors?
Legal Position of Is director an

Directors Employee?
Section 149: Company to have a Board of Directors
OPC Private Public
Q: Can a company prescribe a higher no. of

Minimum Directors?
Ans: Yes, any company can.
P a g e 2 | 29
Section 164: Disqualifications for Appointment of Director
 Unsound mind: Declared by a Competent Court (can

become after becomes of “sound” mind)
 Insolvent (Undischarged or Pending Application)
 Convicted by a Court of any offence (India/Abroad;
Moral Turpitude or otherwise): Min 6 Months Jail & 5
Years not elapsed from sentence expiry [ if Min 7 Years
Jail: Permanent Disqualification] (even if appeal or
petition filed)
 Court/Tribunal order: DISQUALIFIED & order is in force
(even if appeal or petition filed)
 Not paid calls on Shares (incl. Joint ownership): 6
Months elapsed from the last day fixed for payment
 Sec 188 Offence convicted: 5 Years not elapsed (even if
appeal or petition filed)
 No DIN [Sec 152(3)]
 Sec 165(1) non-compliance: No. of Directorships
A Saving for a new director who joins a company which

is already in default of 164(2): Disqualification shall not
apply for 6 Months from the date of his appointment.
 Section 164(3): Can any company prescribe any additional grounds of Disqualification?
P a g e 3 | 29
Section 167: Vacation of Office of Director (No Opportunity of Being Heard,

No Resolution: Director shall leave office immediately)
 Section 167(1): Grounds for vacation of office of Director
a) 164 Disqualifications [if 164(2): Vacate in all the companies except the defaulting one]
b) Absent in Board Meetings for 12 Months: with/without seeking leave of absence of Board
c) Sec 184 non-compliance: contravention or failure of disclosure of interest in any
contract/arrangement in which he is directly/indirectly interested
d) Court/Tribunal order-disqualified
e) Convicted of any offence (moral turpitude/otherwise)-Min 6 months imprisonment
f) Removed in pursuance of the provisions of this Act (E.g.: 217, 169)
g) Appointed due to virtue of any office/other employment in holding/subsidiary/associate:
Ceases to hold that position/that employment
 Section 167(2): Penalty for contravention (when director knows his office has fallen
vacant)
 Section 167(3): What if all the directors offices are vacated?
Imp Note: Only a private company can

prescribe any additional grounds for
“disqualification” & “vacation”.
 Section 167(4): Can any company prescribe any additional grounds of vacation?
P a g e 4 | 29
Section 165: Number of Directorships

 Section 165(1): Maximum Number of directorships
Exclude Dormant
Co. [Explanation
Include those private co. which are either subsidiary

or holding of a public company. [Explanation I]
Example: Inclusion of Various Companies in the limits of 10 and 20

Particulars 10 20
 PSU (not a Govt Co)
 Foreign Co/ Foreign Body Corporate (irrespective of whether
Holding/Subsidiary/Associate of an Indian Co)
 Public Co: Dormant
 Private Co: Dormant
 Sec 8 Company
 Private Co: Subsidiary of a Public Co.
 Small Shareholder Director in a Public Co.
 Alternate/MD/WTD/Nominee in a Public Co.
A person can be a small shareholder director in Max. 2 Companies (we will study this later
in Sec 151).
P a g e 5 | 29
 Section 165(2): Lesser number of directorships may also be specified
 Section 165(3), (4), & (5): Directorships exceeding the maximum limit before the
commencement of this Act (Transition Period)
 Section 165(6): Penalty for contravention of sub-section 1 (Both the limits: 10 & 20)
May’21: Rs. 5,000 for each day after the Nov’ 21 Onwards: Rs. 2,000 for each day after
first during which the default continues the first during which such violation continues,
subject to a maximum of Rs. 2,00,000
Section 149(1) Second Proviso: Woman Director
Rule 3:
 Every Listed Company
 Every other Public Company
o PSC
o Turnover
 Newly Incorporated Co: Appoint within 6
Months from incorporation
 Intermittent Vacancy of Woman Director:
Filled by Board: Earliest but not later than
 Immediate next BM
 3 Months from Vacancy
Section 149(3): Resident Director
P a g e 6 | 29
Section 149(4): Independent Director
 What if Higher number of ID required

due to Audit Committee Composition?
Then such higher number shall be
applicable. [1st Proviso to Rule 4(1)]
What if the conditions of Applicability not fulfilled in any particular year?

Don’t comply with the provisions if any of the conditions of sub-rule (1) not met for 3
Consecutive Yrs. [Third Proviso to Rule 4(1)]. Comply when meets again!
What if any higher number of Independent Directors prescribed by law for a

particular class of companies?
 Section 149(5): Time limit to comply with the provisions of sub sec (4) i.e. Independent
Director [Transition Period]
P a g e 7 | 29
 Section 149(6): Who can be an Independent Director? Criteria for Eligibility
X Ltd
MCA Clarification regd. 149(6)(c):
 Any transaction entered by the ID with the Co.

which is at Par with any member of general
public=it is NOT a pecuniary relationship.
 Pecuniary relationship does not include:
 Remuneration-Sitting fee u/s 197(5);
 Reimbursement of expenses;
 Profit related commission approved by the
members.
(i) holding any security/interest (ii) Indebted to the (iii)Given Guarantee or Security
in S.A.C.H SACH or their of Rs 50 Lacs in connection with
During Promoters or indebtedness of a 3rd Person to
Current/Last 2 FY Directors in Excess SACH or their Promoters or
of 50 Lacs Rupees Directors of such holding Co.
At any time during At any time during
Current/Last 2 FY Current/Last 2 FY
P a g e 8 | 29
(iv) has any other pecuniary transaction or relationship with SACH=Amounting to 2% or

more of its Gross Turnover or Total Income singly or in combination with the
transactions referred above [i,ii,iii]. {i.e., it can amount to less than 2%}
Holds or held in Last 3 FY position: Employee or KMP of SACH
Is or has been in Last 3 FY Employee or Proprietor or Partner
CEO or Director or
whatever name called
As per Rule 5: Should have

appropriate skills,
experience, knowledge in
field like sales, marketing,
finance law etc.
P a g e 9 | 29
 Section 149(7): Declaration by Independent Director
“I meet the criteria of

Sec 149(6)”
 Section 149(8): Code for independent directors
 Section 149(9): Remuneration of Independent Directors
As per Rule 4 of the Companies (Appointment and Remuneration of Managerial

Personnel) Rules, 2014: sitting fees of the Independent Director shall not be less than
the sitting fees of the other directors.
 Section 149(10) & (11): Tenure+ MCA Clarification
Office
Start
Reappointment Reappointment
MCA Clarification: Total Max Period of tenure

allowed by law=10 Years. E.g.: if a person serves
4+4 Years: Now, he will have to serve the cooling
off period of 3 Years.
P a g e 10 | 29
 Section 149(12): Liability of Certain Persons
 Section 149(13): Retirement by rotation
Exception: The entire concept of “Independent Directors” is not applicable on a Sec 8

Company which is in compliance of sections 92 & 137.
Section 150: Manner of Selection & Databank of Independent Directors
GM Approval & Explanatory

Statement: Justification of
the person
 Section 150(3): Data Bank Creation

Rule 6 of Companies (Appointment and Qualification of Directors) Rules, 2014:
Compliances required by a person eligible and willing to be appointed as an
independent director
Apply online to the Institute
for name inclusion in the date
bank for a period of 1 Year or
5 Years or lifetime. (Fees
differ as per the time period)
 ID shall submit a declaration of compliance of Sub Rule

(1) & (2) while submitting the 149(7) declaration.
 Renewal application shall be filed within 30 Days of
Expiry. (obviously, no renewal in case of lifetime
inclusion)
 “Institute”=Indian Institute of Corporate Affairs at
Manesar
P a g e 11 | 29
as a director or key managerial personnel, as on the date of inclusion of his name in

the databank, in one or more of the following, namely:
(a) listed public company; or
(b) unlisted public company having a paid-up share capital of rupees 10 crore or more;
or
(c) Body Corporate listed on a recognized stock exchange
 or in a country which is member of FATF on money laundering & securities market

regulator of that state is a member of IOSC; or
 bodies corporate incorporated outside India having a PSC of US$ 2 million or more; or
 Statutory corporations set up under an Act of Parliament or any State Legislature
carrying on commercial activities; or
 in the pay scale of Director or above in the MCA or the MOF or MCI or the MHI and
Public Enterprises and having experience relating to corporate or securities or economic
laws; or
 in the pay scale of Chief General Manager or above in the SEBI or the RBI or the IREB
or the IRDA or the PFRDA and having experience in matters of corporate or securities
or economic laws.
Section 166: Duties of Directors
Subject to the Act in Good Faith exercise his duties with

provisions of this (Promote the objects of due and reasonable
the Co for the benefit of
act: he shall act as it's members & in the best
care, skill and diligence
per the Articles of interests of the Co, EE, SH, and shall exercise
the Company Community, Environment) independent judgment
Not achieve or attempt to

Not involve in situations: achieve any undue gain or Don't Assign his
direct/indirect interest advantage either to Office to any
which conflicts/may himself or to his relatives,
conflict with the interest partners, or associates (if person (if Assigns:
of company guilty: Pay the gain to the VOID)
Co.)
P a g e 12 | 29
 Section 166(7): Penalty for Contravention
Section 152: Appointment of Directors
 Section 152(3): DIN or any other number required to be a Director

 Section 152(4): Furnishing certain details
 Section 152(5): Consent to act as Director
No consent required for a

government company: if
appointment is done by CG
or SG.
Proviso to Sec 152(5): When an ID is appointed in the GM, an explanatory statement shall be
annexed to the Notice of GM that in the opinion of the Board: he fulfills the conditions to be an
ID [this does not apply on a Sec 8 Co, which is in compliance of sections 92 & 137.
P a g e 13 | 29
Section 153-159: Provisions of DIN
Attachments (Copies: scan & file)

 Photograph;
 Proof of Identity & Proof of Residence
 Board Resolution proposing his
appointment as director in an existing
company;
 Specimen Signature duly verified.
Defects not Defect rectified Proper

removed in partially or info. Still correction
the given time found defective done
 Application for Allotment of DIN: Section 153 Read with Rule 9

 Allotment of DIN: Section 154 Read with Rule 10
 Prohibition to obtain>1 DIN: Section 155
 CG may prescribe any identification No. which shall be treated as DIN, & then this section’s
requirements will not apply or apply as prescribed. [Proviso to Sec 153]
 DIN includes DPIN: Designated Partnership Identification Number. (it’s required for LLP).
 1 person shall be allotted 1 din, which is valid for lifetime. (Rule 10)
 If a person does not have a surname: mention the surname of his/her Father/Grandfather
+ file a declaration in Form DIR-3A. [Rule 9(4)]
 Sec 158: indicate DIN on every return/document (relates or reference to a director)
 Sec 159: Penalty on any director/individual for Sec 152, 155, 156 default= up to Rs. 50,000
+ up to Rs 500/Day after the first if continuing default
P a g e 14 | 29
Cancellation, Surrender, Changes
Cancel/Deactivate (by CG/RD, Noida or

authorized officer by RD: after verifying
application+Proof/Particulars [Rule 11]
 Duplicate (merge the data of both with the
validly retained DIN)
 Obtained by wrongful manner or
fraudulent means (Opportunity of being
heard to be given)
 Death
 Unsound mind (by a competent court)
 Adjudicated as an Insolvent
 Surrender
 KYC-Failure (re-activated only after KYC
filing) (can be by CG Authorized Person)
P a g e 15 | 29
When a New Company is being incorporated and the proposed directors do not have an
approved DIN: Maximum of 3 Directors can be mentioned in the Form INC-32 (spice), and
DIN may be allotted to max 3 such persons through FORM INC-32.
Section 152(6): Concept of Rotation and Retirement of Directors
If AGM not held up to the last due date, the directors

liable to retire by rotation: vacate the office on the last
date till which the AGM should have been held. [B.R.
Kundra V Motion Pictures Association]
Regarding the resulting vacancy: Exclude 2 directors from Total while calculating
“Rotational”:
 the company may reappoint the
1. Independent Directors [reference: Section
same person; or
149(13)]; AND
 some other person (sec 160 2. Nominee Directors appointed by any financial
compliance); or institution under a separate act of parliament
 may choose not to fill the vacancy. whose provisions override our Act or by Govt.
Who Appoints? Applicability & Non-Applicability

 Rotational Directors: appointed at  This concept applies only on Public Companies
GM i.e., by the Members (+ Private which are subsidiary of public).
 Non-Rotational: subject to AOA Exception: 152(6),(7) (Sec 92 & 137 complied)
and by default, are appointed by a) Unlisted Govt Co in which Min. 51% PSC held
Members (E.g.: can be appointed by CG/SG/SGs/CG+SG(s);
by BOD also) b) Subsidiary of (a)
P a g e 16 | 29
Let’s practice some questions:
Section 152 (7): Deemed re-appointment of Retiring Directors in Certain

Cases
Deemed Reappointment except

 Resolution Put & lost @
that/Previous meeting
 Unwillingness expressed by
notice-writing to the Co or BOD
 Disqualified
 OR/SR Required as per this Act
 Sec 162 applicable
P a g e 17 | 29
Section 160: Right of Persons “other than Retiring Directors” to stand for
Directorship (at AGM/EGM)
Action by the company after receiving the

Notice (Sec 160(2) read with Rule 13)
 Inform the members at least 7 days
before the GM through e-mails (those
who have given) and in writing to others.
 Shall also place it on the website of the
company.
Individual notices not necessary: if such
candidature/notice is advertised not less
than 7 days before at least once in a
vernacular and English language newspaper
of that district where Reg Office is situated.
Non-applicability of Sec 160 (if Sections 92 & 137 complied)

o Govt Co: whose entire PSC held by CG/SG/SGs/CG+SG(s)
o Wholly Owned Subsidiary of above Govt Co.
o Private Company
o A Sec 8 Co (if AOA provide for election of directors by ballot)
P a g e 18 | 29
Section 151: Small Shareholders Directors

A listed company may have one director elected by such small shareholders in such manner
prescribed (Rule 7). Small SH=SH holding shares of Nominal Value of not more than Rs 20,000
or any other prescribed amount. (Explanation to Section 151)
Rule 7
• A Listed Co may appoint (Suo Motu or Application by Eligible Small SH)
• Eligible SH of a Listed Co
For • 1,000 SSH
Whom ? • 1/10th of Total SSH
• Serve a notice at least 14 Days before the meeting giving details under
their signatures: Name, Address, Shares held & Folio number of the
proposed director & of the Small SH who are proposing the appointment
Notice • No need of shares and folio no. if that person does not hold shares.
• DIN
Statement • "Not Disqualified"
along with • Consent
the Notice
• Only if he is qualified as per 149 (6) and

• gives a declaration as per 149(7). [will vacate if criteria non-
SSD as ID compliance later on]
• no retirement by rotation (but, will be included in total)

• Tenure: Max 3 Consecutive Years
152 Applies • No Reappointment on expiry of Tenure (Cooling off period of 3 Years:
Except No Direct or Indirect association or appointment in any other capacity)
• in Max 2 Companies at the same time (Provided the second co's

SSD in how business is not in conflict/competing with the first company)
many co ?
P a g e 19 | 29
Section 161: Appointment of Additional Director, Alternate Director, a

director to fill Casual vacancy and Nominee director
161(1) 161(2) 161(4)
BAsIs ADDItIoNAl AltErNAtE cAsuAl

Basic To meet the urgent To fill in the position To fill in the Casual
Meaning requirements of the of a Director during Vacancy (not
& Purpose management: for e.g., his absence for not mandatory to fill)
excess workload. less than 3 months caused by any of the
from India. reasons like death etc.
of any director
appointed in a GM.
Power to BOD can appoint only BOD can appoint if BOD can appoint, subject
appoint if AOA grants the authorized by to what AOA says
power. (BOD does not (basically, BOD has
 AOA OR inherent power but if AOA
have any inherent
 OR (Members says something: Follow it),
power, it needs to be
allow it) and approval of members
conferred by AOA). required in the immediate
next GM.
Eligibility If a person fails to get  Should not be No disqualification
appointed as a holding any mentioned as such.
director in the GM: He alternate
cannot become an directorship for
Additional Director. some other person
in the same
company.
 Should not be
holding directorship
in the same
company.
P a g e 20 | 29
Tenure  Up to the date of Till the time permissible Up to the date the
the next AGM to the director whose director whose place he
place he has taken (will has taken would have
 Last date on which
obviously vacate held if had not vacated.
AGM should have whenever he returns
been held back to India). Note: Director filling in
Whichever: EARLIER the casual vacancy is
Note: “Automatic
not a “casual director”.
Reappointment of
He shall have all the
retiring directors”
provision on Original responsibilities, duties
Director, and not on etc. just like a normal
Alternate Director. director.
`Circular YES YES NO (BR at the Meeting
Resolution of Board)
Possible?
Subject to the articles of a company, the Board may appoint any person as a
director nominated by any institution in pursuance of the provisions of any
law for the time being in force or of any agreement or by the Central
Government or the State Government by virtue of its shareholding in a
Government company, in which case BOD can’t say no.
Section 163: Proportional Representation (optional in nature)

 Notwithstanding entire act (Link: Sec 169) NON-Applicability (92 & 137)
 AOA should provide it
a) A Govt Co: Entire PAID Up
 Min 2/3rd of Total No. of directors by this method
Share Cap by
 This method may be applied once in every 3 Years
CG/SG/SGs/CG+SG(s)
 Any casual vacancy: filled same as sec 161(4)
b) Wholly Owned Subsidiary of (a)
P a g e 21 | 29
Section 162: Appointment of Directors to be Voted Individually
SHAREHOLDERS
164(2): A resolution moved in contravention of sub-section (1) shall be void,

whether or not any objection was taken when it was moved.
164(3): A motion for approving a person for appointment, or for nominating a

person for appointment as a director, shall be treated as a motion for his
appointment.
NON-Applicability (provided 92 & 137 complied)

a) A Govt Co: whose entire Paid Up-Share capital is held by
CG/SG/SGs/CG+SG(s)
b) Wholly Owned Subsidiary of (a)
c) A Private Company
P a g e 22 | 29
Section 168: Resignation of Director
Resignation Effective
Director may resign Date: Notice Liability for Acts
by giving notice in received by the Co or during his tenure:
Writing to the any Date mentioned CONTINUE
company in Notice- Later
Director may also If all directors Resign

forward the copy of or Vacate: Promoter or
resignation+ detailed in his absence: CG
Company shall take reasons to Registrar shall appoint the
note of the Same within 30 Days of required no. of
Resign: DIR 11 (Rule directors
16)
Co. shall intimate the

Above appointed
Registrar within 30 Fact of Resignation in directors shall stay
days of receipt: DIR- BOD Report placed in till the directors are
12 & post the info. on the immediate next appointed in GM
GM
it's website (Rule 15)
Proviso to Rule 16: In case a company has already filed Form DIR-12 with the Registrar
under Rule 15, a foreign director of such company resigning from his office may authorise in
writing a practising chartered accountant or cost accountant in practice or company secretary
in practice or any other resident director of the company to sign Form DIR-11 and file the
same on his behalf intimating the reasons for the resignation.
P a g e 23 | 29
Section 169: Removal of Directors (before tenure expires)
P a g e 24 | 29
If the time permits it to do so,

(a) in any notice of the resolution given to members of the company, state the fact of the
representation having been made; and
(b) send a copy of the representation to every member of the company to whom notice of the
meeting is sent (whether before or after receipt of the representation by the company), and if
a copy of the representation is not sent as aforesaid due to insufficient time or for the
company’s default: the director may without prejudice to his right to be heard orally require
that the representation shall be read out at the meeting.
 NO Need of Circulation: Provided that copy of the representation need not be sent out and
the representation need not be read out at the meeting if, on the application either of the
company or of any other person who claims to be aggrieved, the Tribunal is satisfied that
the rights conferred by this sub-section are being abused to secure needless publicity for
defamatory matter; and the Tribunal may order the company’s costs on the application to
be paid in whole or in part by the director notwithstanding that he is not a party to it.
 Director can be removed under section 242 also (by Tribunal).

 Compensation can be paid to the director in respect of his termination as
appointment of director or any other appointment terminating with that as
director (i.e.: compensation can be paid to the director removed u/s 169: which
is subject to sec 202); but not for Director removed u/s 242.
 Reasons for removal of director in the special notice: Not required. [LIC V Escorts
Ltd]
P a g e 25 | 29
Section 170: Register of Directors & Key Managerial Personnel & their
Shareholding
 Details of Directors & KMP + Details of their shareholding in S.A.C.H + Subsidiary of
Holding (Prescribed details as per Rule 17): Register at Registered Office.
 Co. to file DIR-12 with the Registrar within 30 days of any appointment/change.
(Rule 18)
Section 171: Member’s Right to Inspect [the register kept u/s 170(1)]
Section 172: Punishment (if no specific punishment provided in this

Chapter)
P a g e 26 | 29
Let’s look at all the Rules we studied above:

The Companies (Appointment & Qualifications of Directors) Rules, 2014
Topic Rule
Woman director on Board 3
No. of Independent Directors 4
Qualifications of Independent Director 5
Data Bank of Independent Directors 6
Small Shareholders’ Director 7
Consent to act as director 8
Application for appointment of DIN before 9
appointment in an existing company
Allotment of DIN 10
Cancellation or Surrender or Deactivation of DIN 11
Intimation of changes in Particulars specified in 12
DIN application
Notice of Candidature of a person for Directorship 13
Directors KYC 12A
Notice of Resignation of Director 15
Copy of Resignation to be forwarded by Director 16
Register of Director & KMP 17
Return containing the Particulars of Directors & 18
KMP
P a g e 27 | 29
Learning Hacks
May-21
Nov-21
onwards
May-21
Nov-21
onwards
May-21
Nov-21
onwards
P a g e 28 | 29
A Government Company (Provided Sec 92 & 137 Complied)
A Sec 8 Company (Provided Sec 92 & 137 Complied)
A Private Company (Provided Sec 92 & 137 Complied)
P a g e 29 | 29

Directors Comprehensive Concept Book

Uploaded by

Document Information

Original Description:

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Directors Comprehensive Concept Book

Uploaded by

Copyright:

Available Formats

Directors | Comprehensive Concepts Book CA Siddhesh Valimbe

INDEX: AppoINtmENt & QuAlIfIcAtIoN of

Particulars Section No. Page

Chapter 1: Appointment & Qualification of Directors (Chapter XI of the Companies

Basic Meaning of Certain Terms (Introduction)

Why do we need a Board of Directors?

Legal Position of Is director an

Section 149: Company to have a Board of Directors

OPC Private Public

Q: Can a company prescribe a higher no. of

Section 164: Disqualifications for Appointment of Director

 Unsound mind: Declared by a Competent Court (can

A Saving for a new director who joins a company which

Section 167: Vacation of Office of Director (No Opportunity of Being Heard,

 Section 167(3): What if all the directors offices are vacated?

Imp Note: Only a private company can

Section 165: Number of Directorships

Include those private co. which are either subsidiary

Example: Inclusion of Various Companies in the limits of 10 and 20

Section 149(1) Second Proviso: Woman Director

Section 149(3): Resident Director

Section 149(4): Independent Director

 What if Higher number of ID required

What if the conditions of Applicability not fulfilled in any particular year?

What if any higher number of Independent Directors prescribed by law for a

MCA Clarification regd. 149(6)(c):

 Any transaction entered by the ID with the Co.

(iv) has any other pecuniary transaction or relationship with SACH=Amounting to 2% or

Holds or held in Last 3 FY position: Employee or KMP of SACH

Is or has been in Last 3 FY Employee or Proprietor or Partner

As per Rule 5: Should have

“I meet the criteria of

 Section 149(8): Code for independent directors

 Section 149(9): Remuneration of Independent Directors

As per Rule 4 of the Companies (Appointment and Remuneration of Managerial

 Section 149(10) & (11): Tenure+ MCA Clarification

MCA Clarification: Total Max Period of tenure

 Section 149(13): Retirement by rotation

Exception: The entire concept of “Independent Directors” is not applicable on a Sec 8

Section 150: Manner of Selection & Databank of Independent Directors

GM Approval & Explanatory

 Section 150(3): Data Bank Creation

 ID shall submit a declaration of compliance of Sub Rule

as a director or key managerial personnel, as on the date of inclusion of his name in

 or in a country which is member of FATF on money laundering & securities market

Section 166: Duties of Directors

Subject to the Act in Good Faith exercise his duties with

Not achieve or attempt to

Section 152: Appointment of Directors

 Section 152(3): DIN or any other number required to be a Director

No consent required for a

Section 153-159: Provisions of DIN

Attachments (Copies: scan & file)

Defects not Defect rectified Proper

 Application for Allotment of DIN: Section 153 Read with Rule 9

Cancellation, Surrender, Changes

Cancel/Deactivate (by CG/RD, Noida or

Section 152(6): Concept of Rotation and Retirement of Directors

If AGM not held up to the last due date, the directors

Who Appoints? Applicability & Non-Applicability

Section 152 (7): Deemed re-appointment of Retiring Directors in Certain

Deemed Reappointment except

Action by the company after receiving the