The concept of Woman director was introduced with the Companies Act of 2013, when the Government inserted an ordinance making it necessary to appoint a Woman Director to a company’s board of directors provided certain requirements are met.
In accordance with the second proviso to Section 149(1) and Rule 3 of the Companies (Appointment and Qualification of Directors) Rules, 2014, the following are the criteria for companies that must appoint Woman Directors under the Companies Act, 2013:
- Every listed company.
- Every public company having paid-up share capital of Rs. 100 crore or more.
- Every public company having minimum turnover of Rs. 300 crore or more.
Woman directors can be nominated during the establishment of a company or after it has been registered, with the agreement of the board of directors and shareholders.
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Procedure to appoint a Woman Director
There is no special procedure for appointing a Woman Director; instead, the procedure is the same as for other directors.
- Ensure that the prospective individual to be appointed as a Woman Director meets the requirements of Section 149(6) and Rule 5 (Companies (appointment and qualification of Directors) Rules, 2014.
- Ensure that the prospective Woman Director is not disqualified under Section 164 and 165 of the Companies Act 2013.
- Ascertain that the individual sought to be appointed as a Woman Director has provided the company with her DIN as well as a statement in Form DIR-8 declaring that she is not disqualified to serve as a director under the requirements of this Act(Sec 152(4) and Rule 14 of (Companies (appointment and qualification of Directors) Rules, 2014.
- Obtain approval to function as Director in Form DIR-2 before appointing an individual as a Woman Director.
- In writing, send a notice of the board meeting and the agenda, or a shorter notice if there is an urgent matter, to each of the company’s directors.
- Hold a board meeting to determine if a quorum is present as required by Section 174, and then pass the following resolution:
i. Resolution for the appointment of a Woman Director subject to shareholder approval at the company’s general meeting.
ii. To authorise the company secretary or director to sign and fill out the appropriate e-Form, as well as to perform any other actions, deeds, or things necessary to give effect to the resolution.
iii. To set the date, time, and location for the company’s general meeting.
iv. To approve the draft meeting notice, as well as the explanatory statement appended to the notice, as required by Section 102 of the act.
v. To approve the company’s Director or Company Secretary to sign and issue the general meeting notice.
- Hold a general meeting on the scheduled day and approve an ordinary resolution appointing a Woman Director.
- Within 30 days of her appointment, file e-Form DIR-12, which contains the details of the Director’s appointment.
- Make the required entries in the Director’s and Key Management Personnel’s Shareholding register.
Intermittent Vacancy of a Woman Director
In the event of an intermittent vacancy of a woman director, the board must fill it as soon as possible, but no later than the next board meeting or three months from the date of the vacancy, whichever earlier.
Alternative Director
In the event that a Woman Director is absent for more than three months, the board shall designate an alternate director to guarantee the company’s smooth operation. Following the return of the Woman Director, the alternate director will depart the company. It is optional for the firm to designate an alternate director if there are more than one Woman Director.
Term of Woman Director
From the date of appointment, a Woman Director can maintain the post of Director until the following Annual General Meeting. She has the right to run for re-election at the general meeting. Woman directors’ terms are subject to rotation, much like those of other directors. A Woman Director, like any other director, can give notice to the company and submit her resignation at any time before the end of her term.
Penal Provisions for Non-Compliance
Violations of any of the provisions of Chapter XI are punishable under Section 172 of the Act. Sections 149 to 172 of the Act are covered in Chapter XI, which is dedicated to the appointment and qualification of directors. As a result, noncompliance with the nomination of a woman director will result in the following penalties:
- The Company; and
- Any of its officers who is in default shall be fined not less than fifty thousand rupees (Rs. 50,000/-) but not more than five lakh rupees (Rs. 5,00,000/-).
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Author Bio
Intermittent vacancy of women dirctor- Rule 3 of Companies (Appointment and qualification of Directors ) Rules , 2014 lays down -as follows:
“any intermittent vacancy of a woman director shall be filled-up by the Board at the earliest but not later than immediate next Board meeting or three months from the date of such vacancy whichever is later.”
Pls make reasonable correction instead of “later” you have mentioned “earlier”.
MGT- 14 is also required to be filed which you have not mentioned.