Minimum & Maximum age of Directors: an analysis

What should be the minimum age of a person to get directorship in a Company and the maximum age until which he can serve?

Certainly, this is one of those questions which we often ignore, especially in case of Private Companies.

However, it is pertinent to have conceptual clarity regarding the same.

Now, let’s have a look at what the law has to say:

1. Companies Act, 2013, Rules & Regulations made thereunder:

The Companies Act, 2013 does not provide for the minimum & maximum age of Directorship in general but in particular, there is a specific mention as to the age limit of MD, WTD & Manager under Section 196 of the Act. Section 196(3)(a) provides that, the age of MD/WTD/Manager should not be below 21 years & should not be 70 years or more. Further, it is also provided that, appointment of a person who has attained the age of 70 years shall be made by passing a Special Resolution (SR). Furthermore, where no such SR is passed but votes cast in favor of the motion exceed the votes, if any, cast against the motion and the Central Government is satisfied, on an application made by the Board, that such appointment is most beneficial to the company, the appointment of the person who has attained the age of 70 years may be made.

2. SEBI (LODR) Regulations, 2015:

a. As per Regulation 16(1)(b)(vii), in case of listed entities, the Independent Director (ID) should not be less than 21 years of age.

b. As per Regulation 17(1A), in case of listed entities, the Company should not appoint or continue the appointment of any person as a Non-executive Director (NED) who has attained the age of 75 years unless SR is passed to that effect.

After considering the above-mentioned provisions, it can be seen that the Companies Act talks about the age limits of only MD/WTD/Manager, on the other hand, LODR Regulations talk about the minimum age of IDs and maximum age of NEDs (which includes ID). In this context the following questions arise:

a. In case of non-listed entities, what is the minimum and maximum age of Directors other than MD/WTD/Manager, like Independent Directors & other NEDs?

b. In case of listed entities, what is the minimum and maximum age of Directors other than NEDs, like MD, WTD?

Before jumping to solution to the above questions and the consequent conclusion, let us consider one of the very important aspect and that is, application for allotment of DIN in form DIR-3. Here, it is pertinent to note that even if the Act has not provided any express mention as to the minimum & maximum age of Directors in general but form DIR-3 which is filed solely for the purpose of obtaining DIN, accepts application of only those individuals who are of minimum 18 years of age. This can also be inferred from the provisions of the Indian Contract Act, 1872, which clearly states that a party should be of at least 18 years (majority) to enter into a valid contract.

Solution to the above-mentioned questions:

a. Minimum: 18 years; Maximum: no limit.

b. LODR Regulations exclusively talks about what is applicable to the listed entities over and above what is provided in the Companies Act, 2013. Therefore, wherever there is no specific mention as to the age of a particular category of Director in LODR, Companies Act shall prevail.

Conclusion: Even though the Companies Act, 2013 is an Ocean in itself, however, it does not provide a blanket solution to all the problems. Therefore, it is important to look at every aspect which is connected with the Act. Many times, including this case, help kits pertaining to respective forms turn out to be the ultimate provider of clarity. So before jumping to a conclusion let’s make it a practice to check every wing of the Act to provide the best advice and solutions.

*****

Disclaimer: The author is based in Jabalpur and is a Practicing Company Secretary dealing in Corporate, Legal & Taxation services. The information contained in this write up, as provided by the author, is to provide a general guidance to the intended user. The information should not be used as a substitute for specific consultations. Author recommends that professional advice is sought before taking any action on specific issues.

The author can also be reached at [email protected]