Comprehensive Guide to Directors: Key Provisions, Regulations, and Compliance Forms

1. Key Provisions and Regulations for Directors

Minimum Number of Directors:

• Private Company: Must have a minimum of 2 directors.
• Public Company: Must have a minimum of 3 directors.
• One Person Company (OPC): Must have a minimum of 1 director.
• Top 2000 Listed Companies: Must have a minimum of 6 directors.

Maximum Number of Directors:

• A company can have a maximum of 15 directors. This limit can be increased by passing a special resolution in a general meeting.

Limit on Directorships:

• A person can serve as a director in a maximum of 20 companies, subject to a limit of 10 public companies.
• A company may impose a lower limit on the number of directorships a person can hold by passing a special resolution.
• For the purpose of calculating the 20 directorships, directorships in Section 8 companies (non-profit organizations) and dormant companies shall not be counted.

Directorship in Listed Companies:

• A person can serve as a director in a maximum of 7 listed companies.
• A Whole-time Director (WTD) or Managing Director (MD) of a listed company cannot serve as an Independent Director in more than 3 listed companies.

Women Directors:

• Every listed company must have at least 1 woman director.
• The top 1000 listed companies must have at least one independent woman director.
• Public companies meeting any of the following criteria must appoint at least one woman director:
  1. Public companies with a paid-up share capital of ?100 crore or more.
  2. Public companies with a turnover of ?300 crore or more.
• Any casual vacancy in the position of a woman director must be filled by the board of directors within 3 months or at the next board meeting, whichever is later.

Independent Directors Requirement:

• If the Chairperson is a Non-Executive Director: At least 33% of the board must consist of Independent Directors.
• If the Chairperson is an Executive Director: At least 50% of the board must consist of Independent Directors.
• If the Chairperson is a Non-Executive Director and is a Promoter, Related to a Promoter, or Holds a Management Position: At least 50% of the board must consist of Independent Directors.
• Listed companies with outstanding superior voting rights shares must have at least 50% Independent Directors on their board.

Age Limit for Directors:

• No person aged 75 years or more can serve as a director of a company unless a special resolution is passed in the general meeting of the company.

Other Provisions:

• Every company must have at least one director who has resided in India for a minimum of 182 days in the previous calendar year.
• Listed companies may appoint a director representing small shareholders upon the request of either 1000 small shareholders or 1/10th of the total number of small shareholders, whichever is less.
  • A small shareholder is defined as a person holding shares of a nominal value (face value) not exceeding ?20,000.
• The Board of Directors can appoint a director to hold office until the next general meeting, which must be regularized by the shareholders of the company in the annual general meeting.
• Financial institutions, the Central Government, or State Governments may nominate a person to serve as a nominee director.
• Under Section 242 of the Companies Act (related to relief for oppression and mismanagement), the Tribunal may appoint a director for the company.
• A director can be removed by an ordinary resolution passed in the Annual General Meeting (AGM) or Extraordinary General Meeting (EGM).
• Independent directors can only be appointed or removed by a special resolution.

2. Compliance Forms Related to Directors

• DIR-2: Consent to act as a director of the company.
• DIR-3: Application for obtaining a Director Identification Number (DIN).
• DIR-5: Application for Surrender of DIN.
• DIR-6: Application for changes in particulars of directors.
• DIR-8: Intimation by Director about Disqualification to the company.
• DIR-9: Report by Company of Disqualification of Director to the Registrar of Companies (ROC).
• DIR-10: Application for Removal of Disqualification of Directors to the ROC.
• DIR-11: Intimation of resignation of a director.
• DIR-12: Form for the appointment or resignation of a director.
• DIR-3 KYC & KYC Web: Forms for the KYC of directors.

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Article Compiled by:-

~Neel Lakhtariya

(LegalMantra.net Team)

Disclaimer: Every effort has been made to avoid errors or omissions in this material in spite of this, errors may creep in. Any mistake, error or discrepancy noted may be brought to our notice which shall be taken care of in the next edition In no event the author shall be liable for any direct indirect, special or incidental damage resulting from or arising out of or in connection with the use of this information Many sources have been considered including Newspapers, Journals, Bare Acts, Case Materials , Charted Secretary, Research Papers etc.