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As per Companies Act, 2013, Company generally appoints Directors in General Meeting by passing an ordinary resolution subject to some exceptions. Moreover, Companies appoint one director at a time, Right? It is affirmative. But it is needless to say that Companies has to do a lot of work where it may require to appoint more than one director through a single resolution. So the question arises, is it possible for a Company to appoint more than one director through a single resolution only? Yes, it is possible after following the provisions of Section 162 of Companies Act, 2013. Another question arises, what will be the requirement of appointing more than one director through single resolution only? The requirement is that, it saves time of the general meeting of the company and other agendas may also get discussed in the meeting.

Section 162 of Companies Act, 2013 states about provisions relating to appointment of more than one director through single resolution. We will discuss it in detail.

Section 162, “Appointment of directors to be voted individually”, states that –

(1) At a general meeting of a company, a motion for the appointment of two or more directors of a company by a single resolution shall not be moved unless a proposal to move such a motion has first been agreed to at the meeting without any vote being caste against it.

Explanation: it can be understood with the following steps –

Firstly, a motion has to be agreed in the same meeting that members are willing to appoint more than one director through a single resolution. How?

Secondly, at the general meeting if there is, say, 1000 members present and voting, and, say, 992 members voted in favors of this motion and 8 members absent themselves from voting, than it will be deemed agreed that 100% members are being agreed with this motion because it has been mentioned above that not a single vote has been cast against the motion.

Thirdly, normal procedure of selecting and approving of director will be followed.

Fourthly, a single ordinary resolution shall be moved to appoint two or more selected directors as approved by the Board of Directors or Nomination and Remuneration Committee, if any.

(2) A resolution moved in contravention of sub-section (1) shall be void, whether or not any objection was taken when it was moved.

(3) A motion for approving a person for appointment, or for nominating a person for appointment as a director, shall be treated as a motion for his appointment.

This section does not apply to Private Companies registered under section 2(68) of Companies Act, 2013.

This section does not apply to Government Companies in which the entire paid up share capital is held by the Central Government, or by any State Government or Governments or by the Central Government and one or more State Governments, and also not apply to wholly owned subsidiary of such government company.

Aman Mittal – B.Com, M.Com, CA Inter

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June 2024