Section 149 and Section 152 of the Companies Act, 1956

[Palaniappan]

Dear Friends, 

I have analysed Section 149 and Section 152 of the Companies Act, 2013 and given below my understanding. Request you to please confirm my understanding;

 

Section 149:

As per Section 149, Public limited company which has paid up capital more than Rs.100 crores or has borrowing more than Rs.200 crores needs to have independent director, not less than 1/3^rd of its total Board strength. Irrespective of reduction in share capital or loan borrowing, the condition continues to exist till the tenure of the Independent Director. For calculation of  no. of independent Director required, any fraction in one third will be rounded off as one. As per my understanding, if fraction is 1.2, then, it should be rounded of as 2. 

Section 152:

As per Section 152, 1/3^rd of the total number of Directors are liable to retire by rotation. As per Section 149 and 151, Independent Directors and Small Shareholders Directors are not liable to retire by rotation. Incase, if the Company has 8 Directors, including 1 Independent Director and 1 small share holder Director, then, as per my understanding, we need to calculate the Directors retire by rotation with remaining 6 Directors and within 6 Directors, 2 Directors can be appointed as directors who are not liable to retire by rotation. 

Regards,

N. Palaniappan., B.Com., LL.B., F.C.S., A.C.M.A.,

[Anant Gupta]

Sir 

i want to ask if the case is like that.

i have 1 MD, 1 Indipendent director and one Executive director then what will be the proportion for calculatind 2/3rd and 1/3rd director for retirement by rotation.

[Anant Gupta]

what if company have only 3 director

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Anant Gupta