Wednesday, September 19, 2018




  • Companies Act Section 149:
(1) Each company has a board consisting of Directors and must -

a) A minimum of three directors in the case of a public undertaking, two 

Directors in the case of a private company and an administrator in the case of an individual
Companies; and

(b) A maximum of fifteen directors: On condition that a company can appoint more than fifteen directors after they have one special resolution: In addition, that class or classes of companies that can be prescribed have at least one woman director.

  • Any corporation which exists on or after the date of entry into force of this Act within one year from this date, the requirements of the provisions meet this Section 149(1):-

  •   Each company must have at least one director who has remained in India as a whole Period of at least one hundred eighty-two days from the previous calendar year. Each listed company must account for at least one-third of the total number of

Directors as independent directors and the central government can prescribe the minimum Number of independent directors in the case of a class or class of public companies.

Explanation:- For the purposes of this subsection, each political group shall be considered in a third party must be rounded as such.

Any company that exists on or after the date of entry into force of this Act within one year from that date or from the date of notification of the In that respect, they may comply with the requirements of Section149 (4).

  • An independent director in relation to a company means a different director than a director Director-General or full-time director or designated director,

(a) who, in the opinion of the Council, is and is a person of integrity relevant expertise and experience;

c) who is or is not a sponsor of the company or its business, subsidiary or Associated company

d) who are not affiliated with the promoters or directors of the Company whose interest Subsidiary or associate; 

e) who has or has no financial relationship with the company, his interest, Subsidiary or associate, or their sponsors or directors in both immediately before fiscal years or in the current financial year;

f) of which no family member has or has financial relationships with the Company, its holding company, its affiliate or affiliate or its promoters or two percent. or more of its gross or total income or fifty lakh rupees or the higher amount that can be prescribed, whichever is lower during the two previous financial years or during the reporting period Year;

e) who neither he nor one of his relatives - holds or has held the position of executive officer was an employee of the company or its holding company, subsidiary or associate Company in one of the three financial years just before the year in which it is proposed to be appointed; 

(ii)  has been an employee or an owner or partner, in three financial years immediately before the year in which it is proposed to be appointed to:-

(A) A company of practicing accountants or secretaries or cost auditors the company or its holding company, subsidiary or associate; or 

(B) a legal or consulting firm that has or has completed a transaction with the Company, its holding company, its subsidiary or its affiliated company at ten percent. or more of the gross sales of such a company; 

(iii) holds two percent with his relatives. or more of the whole Voting rights of the company; or

(iv) is a Chief Executive Officer or Director, by whatever name, a nonprofit organization Organization that receives twenty-five percent. or more of his recipes the Company, one of its sponsors, directors or holding company, subsidiary or associate Company or who owns two percent. or more of the total number of votes Companies; or

(f) who has the other required qualifications?

(7) At the first meeting of the Administrative Board, each Independent Director Participation as director and then at the first board meeting Year or any change in circumstances that may affect their status independent director, explains that he

(8) The Company and the independent directors must comply with the provisions of Annex IV.

(9) Notwithstanding any provision in any other provision of this Act, but subject matter Under the provisions of Articles 197 and 198, an independent director is not entitled to it the stock option and may receive compensation for the compensation provided for in the sub-section Article 197, reimbursement of costs of participation in the Council and other meetings and profit commission as approved by the members.

(10) Subject to the provisions of § 152, an independent director must act for a term of up to five consecutive years, but may be renewed the adoption of a special resolution of the company and its disclosure Appointment in the report of the committee.

(11) Notwithstanding paragraph 10, no independent managing director will remain in office for more than two consecutive terms, but this independent director will be Entitlement to appointment after three years in order to cease to be independent director: Provided that an independent director during the said three-year period otherwise be directly or indirectly linked or associated with the Company. 

Explanation. For the purposes of paragraphs (10) and (11), each term of independent director at the time of entry into force of this Act is not considered a term of office under these subsections.

(12) Notwithstanding the provisions of this Act

(i) an independent director;

(ii) a non-executive director who is not a promoter or officer will only be held responsible for such omissions or orders by a company with his knowledge, attributed to the processes of the council and his Approval or consent or where he did not act diligently.

(13) The provisions of Section 152 (6) and (7) relating to retirement rotating directors do not apply to the appointment of independent directors.

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