Section 149 of Companies Act 2013 deals with Appointment and Qualification of Directors. Same Section also contains Provisions related to Appointment of Independent Directors.

1. Applicability of Independent Directors (“IDs”):

  • All Listed Companies
  • All Public Companies having

a. Turnover is Rs. 100 cr or more

b. Aggregate Outstanding loans, debentures and deposits exceeds Rs. 50 cr


2. Number of Independent Directors required in a Company:

  • Listed Companies : Atleast 1/3rd of total Directors
  • Unlisted Public Companies : Atleast 2 Directors as IDs

Unlisted company

3. Separate Meetings of IDs:

  • Hold atleast one meeting in a financial year with no any other Directors being

seperate meeting

4. Disclosures to be made by Independent Directors (IDs):

  • At very first Board Meeting as an ID participant
  • At every first Board Meeting in every financial year
  • Or whenever there is any material change, which may affect his/her status as ID.


5. Inclusions of IDs’Meeting’s Agenda:

  • Review of the performance of Non-Independent Directors
  • Review of the performance of the Chairperson of the company
  • Assess the quality, quantity and timeliness of flow of information b/w the Board and the Company Management


6. Remuneration:

  • IDs not entitled to any stock options
  • Receive the remuneration by way of sitting fees
  • Or by way of reimbursement of expenses for participation in the meeting(s)
  • Profit related commission as may be approved by the Members


7. Provisions related to Appointment / Re-appointment of IDs:

  • Appointment for a term upto 5 consecutive years, however can be appointed for less than 5 years.
  • Eligible for re-appointment by way of passing Special Resolution and its disclosure to be made in the Board’s report
  • However, IDs cannot hold office for more than 2 consecutive terms.*

Board Report

*One term can be of less than 5 years but appointment cannot be of more than 2 consecutive terms.

8. Provisions related to Vacancy :

  • To be filled up by the Board at the earliest.

Board Report images 1

  • Not later than immediate next BM or three months from the date of Vacancy.

9. Where one can look for IDs?

  • May be selected from ID data bank having names, address and qualification of persons who are willing / eligible to act as ID
  • Data bank is maintained by the Indian Institute of Corporate Affairs at Manesar, Gurugram.
  • Data bank includes the names for a period of one / five years or for life time, it depends upon the payment done by such persons.
  • Any individual (having DIN or not) may voluntarily apply to the Institute for inclusion of his/her name in the data bank.

Board Report images 2

For any further queries related to this topic, please contact undersigned !!

Author – ACS Shampa Juneja
Proprietor, Shampa Juneja & Associates
Associate, HRP Accounting & Advisory Services Private Limited
Mail ID: [email protected]

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Qualification: CS
Company: Shampa Juneja & Associates
Location: Delhi, New Delhi, IN
Member Since: 01 May 2020 | Total Posts: 2

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April 2021