Companies Act, 2013 Procedure

Procedure for Appointment of Women Director on Board

Aakanksha Singhal Aakanksha Singhal
Aakanksha Singhal

Published on: Dec 9, 2021

Updated on: Dec 9, 2021

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INTRODUCTION

Our society had always been a male dominated society, with corporate world not being an exception to this trend. Women since ages had been striving hard to find a place for themselves in our society, and with the inclusion of women on the Board of a certain class of companies, the Indian Government initiated a welcome step towards diversification of our corporate world and thereby opening a plethora of opportunities for women to explore. Section 149 of the Companies Act, 2013 read with Rule 3 of the Companies (Appointment and Qualification of Directors) Rules, 2014 gives a brief overview of this novel concept.

MANDATORY REQUIREMENTS

  1. Following class of companies are mandated to appoint at least 01 woman director-
    • every listed company
    • every other public company having –
      • paid–up share capital of Rs. 100 crores or more; or
      • turnover of Rs. 300 crores or more.
  2. Every eligible company shall be covered under the provisions of 2nd proviso of section 149 of the Companies Act, 2013 & Rule 3 of the Companies (Appointment and Qualifications of Directors) Rules, 2014 within a period of 06 months from the date of its applicability.
  3. 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
    • within 03 months from the date of such vacancy
    whichever is later.

FOLLOWING PROCEDURE IS TO BE FOLLOWED

  1. Obtain Written Consent and Declaration from the Proposed Women Director
    The Proposed Women Director has to submit Form DIR-2 (Consent to act as a Director) and Form DIR-8 (Intimation by Director about his disqualification) to the Company including a declaration that all the conditions for appointment as a Women Director are duly fulfilled by her.
  2. Obtain Form MBP-1 from the Proposed Women Director
    Company shall obtain a disclosure of interest in Form MBP-1 from the person who is proposed to be appointed as a Women Independent Director.
  3. Obtaining DIN and Digital Signature Certificate [Section 153 of the Companies Act, 2013 and Rule 9 (1) & 9 (3) of Companies Appointment and Qualification of Directors) Rules, 2014]
    • Obtain Digital Signature from Certifying Authority in India
    • The person shall have a valid DIN allotted by the Ministry of Corporate Affairs. At present, application for allotment of DIN can be submitted to MCA only through the company [in case of existing company] where he/she is proposed to be appointed via Form DIR 3 and the following documents;
      • One Passport size Photo in JPG/JPEG format;
      • Board resolution proposing the appointment as Women Independent Director in the existing company;
      • Specimen signature duly verified;
      • Identity Proof [PAN in case of Indian nationals and passport in case of Foreign nationals];
      • Residence Proof [Passport/ Voter ID/ Ration Card/ Driving License/ Electricity Bill/ Telephone Bill/ Aadhaar which shall be 2 months old in case of Indian nationals and 1 year old in case of Foreign Nationals];
      • Any other optional attachment as necessary.
  4. Meeting of Nomination and Remuneration Committee
    Where a Company is required to constitute a Nomination and Remuneration Committee under section 178, it shall receive recommendations from the Committee for the appointment, terms of appointment, remuneration etc. of Women Independent Director by the Board of Directors of the Company. [For convening meeting of Nomination and Remuneration Committee, Refer the Procedure for Conducting Nomination and Remuneration Committee Meeting].
  5. Convene a Meeting of Board of Directors [As per section 173 & SS-1]
    • Issue Notice of Board Meeting to all the Directors of Company at their addresses registered with the Company, at least 7 days before the date of Board Meeting. A shorter notice can be issued in case of urgent business.
    • Attach Agenda, Notes to Agenda and Draft Resolution with the Notice.
    • Hold a meeting of Board of Directors of the Company and pass the necessary Board Resolution-
      • to consider the appointment of Women Director in the cadre of additional Independent Director, subject to the approval of shareholders in the General Meeting;
      • to decide the term of his office which shall be not more than 5 years;
      • to take note of the disclosure of interest received from the Women Independent Director;
      • to issue Letter of Appointment to the person appointed as an Women Independent Director;
      • to authorize the Director or Company Secretary to sign and file requisite form and return with ROC.
    • Listed Company shall submit the disclosure of such appointment within 24 hours from the conclusion of the Board Meeting and post the same on the website of the Company within 2 working days. [Regulation 30 & 46(3) of the SEBI (LODR) Regulations, 2015]
    • Prepare and Circulate Draft Minutes within 15 days from the conclusion of the Board Meeting, by Hand/Speed Post/Registered Post/Courier/E-mail to all the Directors for their comments. [Refer the Procedure for Preparation and Signing of Minutes of Board Meeting]
  6. Filing of Form DIR-12 with the ROC
    After the Board Meeting, a Return of Appointment of Directorship (Form DIR-12) is required to be filed with Registrar within 30 days of appointment with copy of Board Resolution along with Consent to Act as Director and Declaration about her disqualifications. In case of Companies other than OPC and Small Company, the return is also to be certified by a Company Secretary/Chartered Accountant/Cost Accountant. Following documents will be required as an attachment with Form DIR-12:
    • Certified True Copy of the Board Resolution passed;
    • DIR-2 Consent to Act as Women Director;
    • DIR-8 Declaration by Women Director;
    • Declaration of Independence under section 149 (7);
    • Details of interest in other entities in form MBP-1;
    • Letter of Appointment.
  7. Making Necessary entries in Register of Directors
    Company should make necessary entries in the Register of Director and Key Managerial Personals and registers of contract and arrangements in which Directors are interested in Form MBP-4.
  8. Regularize the appointment of Additional Women Independent Director at Annual General Meeting
    Company shall regularize the appointment of additional Women Independent Director in the next Annual General Meeting. [Refer the procedure for Conducting Annual General Meeting]
  9. File Form DIR-12 with ROC
    After the General Meeting, a Return of Appointment of Directorship (Form DIR-12) is required to be filed with Registrar within 30 days of appointment with copy of Ordinary Resolution along with Consent to Act as Director and Declaration about his disqualifications. In case of Companies other than OPC and Small Company, the return is also to be certified by a Company Secretary/Chartered Accountant/Cost Accountant. Following documents will be required as an attachment with Form DIR-12
    • Certified True Copy of the Ordinary Resolution passed
    • DIR-2 Consent to Act as Director
    • DIR-8 Declaration by Director
    • Letter of Appointment.
  10. File Necessary Amendment Application under following Acts
    • Goods and Services Act
    • Shops & Establishment Act
    • Factories Act
    • Foreign Exchange Management Act
    • Inter-State Migrant workmen Act
    • Private Security Agency Act
    • EPF
    • ESI
    • Other Labour Laws
    • Industry Specific Laws

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