Directors are appointed since incorporation of company for the management of business and statutory auditor for auditing company’s books of accounts. But as the company grows based upon their turnover, paid up capital, outstanding loans or borrowings, outstanding deposits as well as based upon various specified criteria and for compliance of corporate governance.

Specified companies are required to appoint various governance functionaries. Applicability for the appointment of various governance functionaries has been listed below:

Chief Executive Officer (CEO): –

The following companies need to appoint a Chief Executive Officer (CEO): –

1. Every Listed Company;

2. Every Unlisted Public Company having Paid-up Capital Rs. 10 crores or more.

Managing Director (MD): –

The following companies need to appoint Managing Director (MD): –

1. Every Listed Company;

2. Every Unlisted Public Company having Paid-up Capital Rs. 10 crores or more.

Whole Time Company Secretary: –

The following companies need to appoint a Whole Time Company Secretary: –

1. Every Listed Company;

2. Every Unlisted Public Company having Paid-up Capital Rs. 10 crores or more;

3. Every Private Company having Paid-up Capital Rs. 10 crores or more.

Chief Financial Officer (CFO): –

The following companies need to appoint Chief Financial Officer (CFO): –

1. Every Listed Company;

2. Every Unlisted Public Company having Paid-up Capital Rs. 10 crores or more.

Internal Auditor: –

The following companies need to appoint an Internal Auditor: –

1. Every Listed Company;

2. Every Unlisted Public Company having:-

a) Paid-up Capital Rs. 50 crores or more;

b) Turnover Rs. 200 crores or more;

c) Outstanding loans or borrowings from banks or public financial institutions exceeding Rs. 100 crores;

d) Outstanding deposits of Rs. 25 crores.

3. Every Private Company having:-

a) Turnover Rs. 200 crores or more;

b) Outstanding loans or borrowings from banks or public financial institutions exceeding Rs. 100 crores.

Cost Auditor: –

All companies, including foreign company, engaged in production of goods and providing services prescribed in

1. Table (A) in rule 3 of The Companies (Cost Records and Audit) Rules, 2014, having aggregate turnover of Rs. 25 crores or more and the overall annual turnover of the company from all its products and services is Rs. 50 crores or more.

2. Table (B) in rule 3 of The Companies (Cost Records and Audit) Rules, 2014, having turnover of Rs. 35 crores or more and the overall annual turnover of the company from all its products and services is Rs. 100 crores or more.

SHALL APPOINT A COST AUDITOR.

Secretarial Auditor: –

The following companies need to appoint a Secretarial Auditor: –

1. Every Listed Company;

2. Every Unlisted Public Company having

a) Paid-up Capital Rs. 50 crores or more;

b) Turnover of Rs. 200 crores or more;

3. Every company having outstanding loans or borrowings from banks or public financial institutions of Rs. 100 crores or more.

Independent Director: –

The following companies need to appoint Independent Director: –

1. Every Listed Company;

2. Every Unlisted Public Company having

a) Paid-up Capital Rs. 10 crores or more;

b) Turnover Rs. 100 crores or more;

c) Outstanding loans, debentures and deposits exceeding Rs. 50 crores.

Note: –

  • Every Listed Company shall have atleast 1/3rd of their directors as independent directors.
  • Every Unlisted Public Company having

a) Paid-up Capital Rs. 10 crores or more:

b) Turnover Rs. 100 crores or more;

c) Outstanding loans, debentures and deposits exceeding Rs. 50 crores

Shall have atleast 2 Directors as independent directors.

Small Shareholder’s Director: –

Every listed which received a notice from not less than 1000 shareholders or 1/10th of total number of shareholders, whichever is lower, shall appoint a Director which is elected by small shareholders.

Nominee Director: –

A company shall appoint a person as director, which is nominated by

1. Any institution in pursuance of the provisions of any law for the time being in force or of any agreement;

2. Central Government by virtue of its shareholding in a Government company;

3. State Government by virtue of its shareholding in a Government company.

Woman Director: –

The following companies need to appoint Woman Director: –

1. Every Listed Company

2. Every Unlisted Public Company having

a) Paid-up Capital Rs. 100 crores or more;

b) Turnover Rs. 300 crores or more.

Details of Authors:

CS GOVIL RATHI SAURABH CHHATRALA
Cs Govil Rathi & Saurabh Chhatrala

(Authors are associated with Ahemdabad based CS firm GOVIL RATHI & ASSOCIATES)

Author Bio

Qualification: CS
Company: GOVIL RATHI & ASSOCIATES
Location: AHMEDABAD, Gujarat, IN
Member Since: 04 Mar 2020 | Total Posts: 8
CS Govil Rathi is Member of Institute of Companies Secretaries of India having terrific experience in legal and secretarial matters. He is Young, dynamic, Enthusiastic, self-motivated and optimistic practicing Company secretary having rich professional experience in Company law matters and other com View Full Profile

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