Ch 1 - Appointment and qualification of Directors - Low/ Medium Importance Flashcards
Retirement of Directors by Rotation [Section 152(6)] - One-third of directors to retire at AGM and who are the directors liable to retire by rotation?
One-third of directors to retire at AGM: Once the number of directors who are liable to retire by rotation is determined, only one-third out of that number shall retire. If such number is neither three nor a multiple of three, then, the number nearest to one-third, shall be considered and such of the directors shall retire from office.
Directors liable to retire by rotation: The directors who actually retire by rotation at every annual general meeting shall be those who have been longest in office since their last appointment .If two or more directors were appointed on the same day, retirement by rotation will be decided between them by mutual agreement among themselves or by lot as the case may be.
Deemed re-appointment of retiring Directors under certain circumstances [Section 152(7)] - Adjournment of general meeting?
If the vacancy of the retiring director is not so filled-up and the meeting has not expressly resolved not to fill the vacancy, the meeting shall stand adjourned till the same day in the next week, at the same time and place.
In case that day is a national holiday, the meeting shall be adjourned till the next succeeding day which is not a holiday, at the same time and place.
Imp point - We cannot just avoid holding of a general meeting based on our comfort, hence adjourned meeting has to be held unless permitted to be extended by the registrar.
DIRECTOR IDENTIFICATION NUMBER (DIN) [SECTION 152 (3) AND SECTIONS 153 TO 159] - Filling of required information in Form attached with relevant documents in DIR 3?
The applicant shall download Form DIR-3 from the portal, fill in the required particulars sought therein, verify and sign the form and after attaching copies of the following documents, scan and file the entire set of documents electronically-
(i) photograph;
(ii) proof of identity;
(iii) proof of residence;
(iiia) board resolution proposing his appointment as director in an existing company
(iv) specimen signature duly verified.
DIRECTOR IDENTIFICATION NUMBER (DIN) [SECTION 152 (3) AND SECTIONS 153 TO 159] - What is the procedure for allotment of DIN as per section 154?
Rejection of the application can be done after following through above process of first communicating and resubmission within a period of 15 days - Then only the application will be rejected.
DIRECTOR IDENTIFICATION NUMBER (DIN) [SECTION 152 (3) AND SECTIONS 153 TO 159 - How to make Intimation of changes in particulars specified in DIN application?
RIGHT OF PERSONS OTHER THAN RETIRING DIRECTORS TO STAND FOR DIRECTORSHIP [SECTION 160] - what is the requirement of a written notice?
APPOINTMENT OF ADDITIONAL DIRECTOR, ALTERNATE DIRECTOR, A DIRECTOR TO FILL CASUAL VACANCY AND NOMINEE DIRECTOR [SECTION 161] - can alternate director be appointed by the original director himself?
The original director _who is leaving to a place outside India cannot appoint an alternate director in his plac_e. It is the Board which shall make the appointment because the authority for such appointment vests in the Board. Following example will make the situation clear:
Important point: Accordingly, as far as attendance in Board Meeting by the original director is concerned, an alternate director may continue to hold office even if the original director joins the meeting by video conferencing, but the
original director will be deemed to have joined only as an invitee and the attendance of the alternate director shall be counted for the purpose of the Board Meeting. This is specific only with respect to matters which
shall not be dealt with through video conferencing.
In such matters where video conferencing is allowed, voting of original director will be counted.
APPOINTMENT OF ADDITIONAL DIRECTOR, ALTERNATE DIRECTOR, A DIRECTOR TO FILL CASUAL VACANCY AND NOMINEE DIRECTOR [SECTION 161] - Provisions of casual vacancy as per section 161(4)?
(i) if the office of any director appointed by the company in general meeting is vacated before his term of office expires in the normal course, the resulting casual vacancy may, in default of and subject to any regulations in the articles of the company, b_e filled by the Board of Directors at a meeting of the Board [which shall be subsequently approved by members in the immediate next general meeting_]14.
(ii) Any person so appointed shall hold office only up to the date up to which the director in whose place he is appointed would have held office if it had not been vacated.
Important Point: where the office of this director is also vacated, then in that case, we have to go through section 160 and the board will be not be allowed to appoint as such the recently vacated director has not been appointed through general meeting as such.
DISQUALIFICATIONS FOR APPOINTMENT OF DIRECTOR [SECTION 164] - basic disqualifications as per section 164(!) of the act?
DISQUALIFICATIONS FOR APPOINTMENT OF DIRECTOR [SECTION 164] - applicability / non applicability to different companies under the act?
MAXIMUM NUMBER OF DIRECTORSHIPS[SECTION 165] - what is the prescription in relation to the transition period of 1 year?
VACATION OF OFFICE OF DIRECTOR [SECTION 167] - what are some basic provisions regarding vacation of the office of the director as per the act?
Important ground: he absents himself from all the meetings of the Board of Directors held during a period of 12 months with or without seeking leave of absence of the Board;
In this case where there is no disqualification as per the provisions of section 164 of the act. then board is advised to co opt the abovementioned person as additional director in the subsequent board meeting as section 164 is not attracted, and so co option will be permitted.
REMOVAL OF DIRECTORS - by shareholder and the tribunal accordingly?
Requirement of Ordinary Resolution41:A company may, by ordinary resolution, remove a director before the expiry of the period of his office except the following:
(a) when a director is appointed by the Tribunal under Section 242.
42(b) when as per Section 163, t_wo-thirds or more of the total number of directors_ are appointed according to the principle of proportional representation, then such directors cannot be removed.
Requirement of Special Resolution in case of removal of re-appointed independent director: An independent director re-appointed for second term under Section 149(10) shall be removed by the company only by passing a special resolution.
Note: Under both the clauses (i) and (ii) above, the director to be removed shall be given a reasonable opportunity of being heard before his removal.
