Tag Archives: Independent Director

Amendments related to Board matters

Posted on July 28, 2017 | Leave a comment

Ministry of Corporate Affairs recently amended the Companies (Appointment and Qualification of Directors) Rules, 2014 by notification of the Companies (Appointment and Qualification of Directors) Amendment Rules, 2017 on 5^th July 2017. A related amendment in the Companies (meetings of Board and its Powers) Rules, 2014 was also made by notification of the Companies (meetings of Board and its Powers) Second Amendment Rules, 2017 for which published notification copy is yet not available.

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MCA introduces Limited Purpose Independent Director in private companies

Posted on April 1, 2015 | 7 comments

An amendment rules notified by MCA introduces concept of limited purpose independent director in private companies. Government is amending existing Companies (Corporate Social Responsibility Policy) Rules, 2014. These rules are being criticised by various eminent jurist for trying to undermine authority of Section 135 of the Companies Act, 2013. Sub – Section (1) of Section 135 mandate for at least one independent director in every company whether it is private or public company. Existing Rule 5 of CSR rules tries to undermine this provision of Section 135 by saying “an unlisted public company or a private company covered under sub-section (1) of section 135 which is not required to appoint an independent director pursuant to sub-section (4) of section 149 of the Act, shall have its CSR Committee without such director”. A rule being subordinate legislation has no constitutional authority to change a provision of the Act.

Amended Clause (i) of Sub – Rule (1) of Rule 5 reads, “an unlisted public company or a private company covered under sub-section (1) of section 135 shall have an independent director for being member of its CSR Committee and such independent director shall have no other duty, obligation and responsibility under the Act.” Consequently, Clause (i) of Sub – Rule (1) of Rule 5 also been deleted.

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Posted in Chapter XI - CA2013, Companies Act 2013, CSR, Governance and Responsibility, Prank

Tagged CSR Corpus, CSR Fund, Independent Director, India, MCA, Ministry of corporate affairs, Private Company, Registrar of Companies, The Companies (corporate Social Responsibility Policy) Rules 2014, The Companies Act 2013

INDEPENDENT DIRECTOR

Posted on July 8, 2014 | 4 comments

According to Section 149 of the Act, every listed company shall have at least one-third of total number of directors as Independent directors. The central government may prescribe minimum number of independent directors in other class or classes of public companies. The Act deals with provisions related to independent directors in details as discussed earlier here.

According to Rule 4 companies (Appointment and Qualification of Directors) Rules 2014, the following class or classes of companies shall have at least two directors as independent directors –

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Posted in Chapter XI - CA2013, Companies Act 2013, CorpGov, Governance and Responsibility

Tagged ¬Companies (Appointment and Qualification of Directors) Rules 2014, Companies (Incorporation) Rules 2014, Companies Act 2013, Corporate Law, Independent Director, India, Ministry of corporate affairs

Quotes from Companies Bill debate in Rajya Sabha

Posted on August 14, 2013 | 2 comments

UPDATE: on 30^th August 2013: Companies Bill 2012 became the Companies Act, 2013 (Act 18 of 2013).

For every new law, legislative intent, which show it in debates taken place in Parliament, become important. These debates offer a guide while drafting subordinate legislation. There are many questions about future rules and regulations. I, here, compiled some important quotes from this debates from Rajya Sabha.[i][ii][iii]

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Posted in Companies Act 2013, CorpGov, CSR, Governance and Responsibility, Truth of Our Time

Tagged Auditor, Chartered Accountants, class-action suits, Companies Act 2013, Companies Bill 2012, CorpLaw, Corporate Law, Corporate Social Responsibility, CSR, Director, Ganguly Committee, Independent Director, India, Legal Reforms, Ministry of corporate affairs, Rajya Sabha, Reforms

Board Structure in Central Public Sector Enterprises

Posted on August 9, 2013 | Leave a comment

Central Public Enterprises in India are not simple business enterprises, but fall under definition of “State” under Article 12 of the Constitution of India. They are subject to Writ Jurisdiction. The Right to Information Act, 2005 is applicable to them.

The Law governing Central Public Sector Enterprises are complex mix of Guidelines/instructions issued by Department of Public Enterprises (DPE), the Companies Act, 1956 regulations of Comptroller and Auditor General of India (CAG), Central Vigilance Commission, and administrative Ministry.

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Interests of Director and Related Party Transactions

Posted on June 7, 2013 | 15 comments

UPDATE: on 30^th August 2013: Companies Bill 2012 became the Companies Act, 2013 (Act 18 of 2013).

DISCLOSURE OF INTEREST BY DIRECTOR (SECTION 184, SUB SECTION 1):

Every director shall disclose his concern or interest in any company or companies or bodies corporate, firms, or other association of individuals which shall include the shareholdings, in such manner as may be prescribed. Such disclosure shall be made on three particular point of time:

(i) At the first meeting of the Board in which he participates as a director;

(ii) At the first meeting of the Board in every financial year; and

(iii) Whenever there is any change in the disclosures already made, then at the first Board meeting held after such change.

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Posted in Chapter XII - CA2013, Companies Act 2013, CorpGov, Governance and Responsibility

Tagged Arms Length Transaction, Companies Bill 2012, CorpGov, CorpLaw, Corporate, Corporate Governance, Corporate Law, Director, Disclosure of Interest, Independent Director, Interest, Legal Reforms, Office or Place of Profit, Reforms, Related Party, Related Party Transaction, Relative, RPT, Voidable Contract

POWER OF BOARD UNDER COMPANIES ACT 2013

Posted on May 31, 2013 | 5 comments

UPDATE: on 30^th August 2013: Companies Bill 2012 became the Companies Act, 2013 (Act 18 of 2013).

In February 2013, I wrote “FOOTSTEPS OF CORPORATE GOVERNANCE IN COMPANIES BILL 2012” and thereafter try to cover all relevant topics related to Corporate Governance. Even though, day-to-day management of company is function of KEY MANAGERIAL PERSONNEL (sometime designated as out of Board Directors); Board of Directors is indeed most Significant body, which virtually rule a company. Not only, APPOINTMENT AND QUALIFICATION OF DIRECTOR as well as their DUTIES, VACATION, RESIGNATION, REMOVAL are subject to close scrutiny by investors, professionals and regulators. Board of Directors has a set of Executive Directors who are APPOINTMENT and MANAGERIAL REMUNERATION has some other significant aspect of Corporate Governance. The Appointment of INDEPENDENT DIRECTORS is one of the most significant contributions of this Bill to Corporate Governance practices in India. This all-powerful company Board exercises its powers in BOARD MEETING but it has some statutory and other BOARD COMMITTEES. Now we will discuss Power of Board of Directors under present Bill.
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Posted in Chapter XII - CA2013, Companies Act 2013, CorpGov, Governance and Responsibility

Tagged Accounts, Board Committee, Board of Directors, Board Powers, Boards’ Report, CG, Companies Bill 2012, Contribution to bona fide Charitable and other funds, Contribution to National Defence Fund, CorpGov, CorpLaw, Corporate Governance, Corporate Law, Director, Independent Director, India, Legal Reforms, Ministry of corporate affairs, Political Contribution, Power of Board of Directors, Profit and Loss Account, Reforms, Resolutions in Board Meeting, Restrictions on Power of Board, Special Resolution

Tag Archives: Independent Director

Amendments related to Board matters

INDEPENDENT DIRECTOR

Board Structure in Central Public Sector Enterprises

POWER OF BOARD UNDER COMPANIES ACT 2013

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