Board of Directors

Under the Companies Act, 2013 (“Companies Act”), the Board of Directors (“BoD”) is the mandatory governing body for a Company incorporated in India.

Division of Duties: Primarily, all BoD members have a fiduciary duty towards upholding the interest of the Company. In addition, in terms of the Companies Act, the BoD members are to (a) act in accordance with the Articles of Association (“AoA”); (b) act in good faith in order to promote the objects of the Company for the benefit of its members and for best interest of other stakeholders;(c) not be in conflict with the interests of the Company; and (d) not achieve or attempt to achieve any undue gain or advantage. [...] Further, the Companies Act prescribes additional duties for Independent Directors (“IDs”), including (a) ensuring that adequate deliberations are held before approving related party transactions; (b) reporting concerns about unethical behavior, actual or suspected fraud or violation of the Company’s code of conduct or ethics policy; (c) not unfairly obstructing the functioning of an otherwise proper BoD or its Committee; (d) ensuring that the Company has an adequate vigil mechanism and users of such vigil mechanism are not prejudicially affected on account of such use; and (e) assisting in protecting the legitimate interest of the Company, Shareholders and its employees.  The BoD is entitled to exercise all powers and do all acts and things, as the Company is authorized to do. Except for certain items, the BoD has the power to delegate its powers to a Committee/Managing Director (“MD”)/Manager/Officer of the Company.

Composition: The BoD (consisting of only individuals) must have a minimum of 3 BoD members in case of a Public Company, 2 in a Private Company and 1 in a one-person Company. The maximum number of BoD members is 15, which threshold can be increased by passing a special resolution at a General Meeting of the Shareholders (“GM”). Every Company must have at least 1 resident BoD member who has stayed in India for at least 182 days in the previous calendar year. At least 1/3 of the BoD of every Listed Company must comprise of IDs, and a Listed Company may also appoint a BoD member elected by a “small Shareholder”, meeting specified thresholds. Further, in certain instances (e.g. where specified thresholds for paid-up share capital, turnover, outstanding loans etc. are exceeded) Public Companies are required to appoint a female BoD member, a full-time MD, full-time Director (“WTD”) and at least 2 IDs on the BoD.

Appointment/Dismissal Competence: The Companies Act prescribes the eligibility criteria for appointment of all BoD members, with a stricter set of qualifications for a MD, WTD and IDs (who all form part of the BoD). BoD members are appointed by the Shareholders at a GM, except in cases where the BoD is empowered under the AoA to appoint “additional directors” or in case of alternates and nominees (nominated by Shareholders and/or lenders). The ”additional directors” appointed by the BoD hold the office until the next GM. Additionally, instead of convening a physical GM, a BoD member may be appointed by way of conducting a Postal Ballot (voting through post or by electronic means) amongst the Shareholders. In case of election of a BoD member by small Shareholders, such appointment shall only take place through a Postal Ballot of the Shareholders. In case of a MD and a WTD their appointment and terms of appointment, have to be approved by the BoD, which would be subject to the approval of the GM. Approval of the central government would be required, if such appointment is at variance to the conditions specified under the Companies Act or where such BoD member is not a resident of India. Further, an ID may be appointed by the BoD after taking into account the specific qualifications prescribed for an ID, and such appointment is then approved at the GM. A BoD member may be dismissed at any time by the ordinary resolution of the GM. Further, at the annual GM of a Public Company, 1/3 of the BoD Members have to retire from office (on the basis of rotation and being those who have been longest in office since their last appointment).

Alternates:  An alternate can be appointed to act for a BoD member during his absence for a period of at least 3 months from India, if so authorized by the AoA or by a Resolution passed at a GM, on largely the same conditions as the BoD member for whom he is acting as an alternate.

Appointment
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Step Action Documentation Signatures? Timing Originals? Notarization/
Certification?		 Waiver of
Step?		 Miscellaneous
1

Convening of BoD Meeting.

Convening notice.

Yes, to be signed by the Company Secretary.

At least 7 calendar days prior to the BoD Meeting, however, shorter notice may be possible if at least one ID (if any) is present at the BoD Meeting.

Yes, notice to be sent by hand-delivery, post or electronic means (in practice, an email is usually followed by a hard copy.

No.

No (not even if all BoD members concur).

In common practice, the BoD (based on the recommendations of a Nomination & Remuneration Committee, if any) nominates a BoD member, however, this is not mandatory.
2

BoD Meeting.

Minutes of the BoD Meeting.

Yes, to be signed by the Chairman of the Company.

At the date as stipulated in the convening notice.

Yes.

No.

No, however, no physical meeting is required (with the exception of appointment of an MD and a WTD) if a written BoD Resolution is adopted.
3

Convening of GM.

Convening notice.

Yes, to be issued by the BoD and signed by the Company Secretary.

Anytime after the BoD Meeting (cf. Step 2) and at least 21 calendar days prior to the GM. Shorter notice may be given if 95% of the Shareholders entitled to vote consent. If nomination is by a Shareholder or the candidate himself at least 7 calendar days notice is to be given. If a Resolution is passed by way of a Postal Ballot (cf. Step 4) at least 30 calendar days is to be given.

Yes, notice may be sent by hand-delivery, post or electronic means.

No.

No (not even if all Shareholders concur).

In a Public Company, If nomination is by a Shareholder or the candidate himself, notice is to be left at the registered office of the Company at least 14 calendar days prior to the GM.
4

GM.

Minutes of the GM.

Yes, to be signed by the Chairman of the GM.

At the date as stipulated in the convening notice.

Yes.

No.

No, however, no physical meeting is required as a Resolution may be passed by a Postal Ballot (voting by post or through electronic means).
5

Filing with Registrar.

(i) Filing form (e-form) along with the prescribed fees;

(ii) Letter of appointment by the BoD;

(iii) Declaration by the first BoD members (as set out in the AoA) and the appointee (in the prescribed form).

Yes, form to be signed by an authorized signatory of the Company.

No later than 30 calendar days following the GM.

Yes, the e-form is considered an original so no hard copies are needed.

Yes, the e-form is to be certified by a practicing professional by affixing a digital signature certificate in the e-form.

No.

The appointee must possess a valid Director Identification Number, his consent to hold the office as a BoD member (in the prescribed form) and a declaration stating that he is not disqualified to act as such.
1
Step 1
>7 days*
2
Step 2
0 days
3
Step 3
>7 (or 21 or 30) days**
4
Step 4
0 days
5
Step 5
0-30 days

0-60 days*

*However, shorter notice may be possible (as set out in Step 1).

**However, shorter notice may be possible (as set out in Step 3)
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Dismissal
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Step Action Documentation Signatures? Timing Originals? Notarization/
Certification?		 Waiver of
Step?		 Miscellaneous
1

Proposal for dismissal by Shareholders.

Special Notice.

Yes, either individually or collectively by qualifying  Shareholders under the Companies Act.

Not earlier than 3 months but at least 14 calendar days before the GM (and at least 7 calendar days prior to the BoD Meeting, however, shorter notice may be possible if at least one ID (if any) is present at the BoD Meeting).

Yes.

No.

No, however, a Special Notice is not required if a Shareholder is not initiating the dismissal (e.g. in case of resignation or disqualification).

Convening notice of a BoD Meeting is sent by the Company Secretary to the BoD along with a copy of the Special Notice.
2

BoD Meeting.

Minutes of the BoD Meeting.

Yes, Minutes to be signed by the Chairman of the BoD.

At the date as stipulated in the convening notice.

Yes.

No.

No, a MD and a WTD may only be removed by convening a physical BoD Meeting. However, in other cases, no physical meeting is required if a written BoD Resolution is adopted.

The BoD is to take note of the Special Notice, however, the BoD do not have a say in the dismissal.
3

Convening of GM.

Convening notice.

Yes, to be issued by the BoD and signed by the Company Secretary.

Anytime following the BoD Meeting (cf. Step 2) and at least 7 calendar days before the GM.

Yes, notice may be sent by hand-delivery, post or electronic means.

No.

No (not even if all Shareholders concur).
4

GM.

Minutes of the GM.

Yes, to be signed by the Chairman of the GM.

At the date as stipulated in the convening notice.

Yes.

No.

No, however, no physical meeting is required as a Resolution may be passed by a Postal Ballot (voting by post or through electronic means).

The dismissed BoD member has the right to be heard at the GM.
5

Filing with Registrar.

(i) Filing form (e-form) along with the prescribed fees;

(ii) Special Notice (or notice of resignation of the BoD member where the member resigns himself)”;

(iii) Evidence of dismissal (e.g. Minutes of the GM).

Yes, form to be signed by an authorized signatory of the Company.

No later than 30 calendar days following the GM.

Yes, however the e-form is considered an original so no hard copies are needed.

Yes, the form is to be certified by a practicing professional by affixing a digital signature certificate in the e-form.

No.
1
Step 1
>14 days and < 3 months
2
Step 2
0 days
3
Step 3
>7 days
4
Step 4
0 days
5
Step 5
0-30 days

> 14 days and < 4 months*

*The possible need for a physical meeting may take additional time.
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