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Who are Qualified to be appointed as Independent Director

Corporate Law | Views: 156 | Comments: 0

Following persons are allowed to be appointed as Independent director:

A) Who, in the opinion of the Board , is a person of integrity and possesses relevant experties & experience;

B) i) Who is or was not a promoter of the Company or its Holding, Subsidiary or Associate Company;
ii) Who is not related to Promoters or directors in the company, its Holding, Subsidiary companies;

C) Who has or had no Pecuniary (relating to Money) relationship with Company and its its Holding, Subsidiary companies or their promoters, directors during the two immediately preceding financial years or during the current financial year;

D) none of whose relatives has or had pecuniary relationship with company, its Holding, Subsidiary companies or their Promoters, directors -amounting to 2% or more of its gross turnover or total income; -or fifty lakhs or such higher amount as may be prescibed, whichever is lower. During the two immediately preceding financial years or during current financial year.

E) Who neither himself nor any of his relative-
1. Holds or has held the position of KMP or has been employee of the Company or its its Holding, Subsidiary companies in any of the 3 financial years;
2. He or his relative has an employee or proprietor or a partner in any of the three financial years immediately preceding the financial year in which he is proposed to be appointed- as a auditor firm, Company Secretary in practice, Cost Auditor, Legal Consultant of the company or its Holding, Subsidiary companies;
3. Holds with relaives 2% or more of the total voting power of the Company;
4. He or his has not be Chief Executive or Director of any Non Profit Organization that receive 25% of its receipt from the Company or its Holding, Subsidiary companies or its Promoters or directors or that NGO holds 2% or more of the total voting power of the Company.

F) Who possesses such other qualification as may be prescribed. Tenure of Director:- an independent director hold office for a term up to 5 consecutive years, -Also eligible for reappointment by passing Special Resolution and also require its reappointment in Boards Report. -He shall not hold office for more than 2 Consecutive terms, but shall not be eligible to appoint after expiration of 3 Years of ceasing to become an independent director. Remuneration to Independent Director:- An independent director shall not be eligible for any stock option as per section 149(9) of Act. But they may receive remuneration by way of fee provided under section 197(5) of the Act. Sitting fees for Board meeting and other committee meeting shall not be exceed Rs. 1,00,000 per meeting.

Date Posted 26-Dec-2019
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What are the different types of directors?

Corporate Law | Views: 251 | Comments: 0

A company can have different types of directors such as:

Managing Director:

A 'Managing Director' refers to a Director who, by a resolution passed at its annual general meeting, or by its Board of Directors or by the virtue of the Articles of Association of the company or by an agreement with the company or, is entrusted with the substantial powers of the management of the affairs of the company.

Whole-time Director:

A Whole-time Director is one who is in full-time employment of the company.

Executive Director:

An Executive Director is also one who is in full-time employment of the company. He can be a whole time director or Managing Director.

Ordinary Director:

An 'Ordinary Director' refers to a Director who participates in the matters that are put before the Board of Directors and attends the Board meetings of a company. These Directors are neither the Whole-time Directors, Executive Directors or Managing Directors.

Independent Director:

An independent director in relation to a company, means a director other than a Whole Time Director, Managing Director, Or Nominee Director. The following companies have to appoint at least two independent directors:

A. Public Companies having Paid up Share Capital of Rs.10 Crores or More;
B. Public Companies having Turnover of Rs.100 Crores or More;
C. Public Companies have total outstanding loans, debenture and deposits of Rs. 50 Crores or More.

Additional Directors:

Any Individual can be appointed as Additional Directors by a company under section 161(1) of the New Act.

Alternate Directors:

As per Section 161(2) A company May appoint, if the articles confer such power on company or a resolution is passed (if an Director is absent from India for atleast three months).
• An alternate Director cannot hold the office longer than the term of the Director in whose place he has been appointed.
• Additionally, he will have to vacate the office, if and when the original Director returns to India.
• Any alteration in the term of office made during the absence of the original Director will apply to the original Director and not to the Alternate Director.

Shadow Director:

A person, who is not appointed to the Board, but on whose directions the Board is accustomed to act, is liable as a Director of the company, unless he or she is giving advice in his or her professional capacity.

Nominee Directors:

They can be appointed by certain shareholders, third parties through contracts, lending public financial institutions or banks, or by the Central Government in case of oppression or mismanagement.

Date Posted 26-Dec-2019
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