As per the provisions of Section 152 of the CA, 2013, an individual holding a valid DIN and not disqualified from being appointed as Director under Section 164 of the CA, 2013, is eligible to be appointed as Director. He shall give his consent to act as a director in writing along with the disclosure of his interest and a declaration that he is not disqualified to become a director under CA, 2013.

The broad steps involved in appointment of a director are: Obtain DSC; Obtain DIN by filing Form DIR-3; Declaration that he is not disqualified from being appointed as the Director in form DIR-8; Written consent of director for his appointment in form DIR-2; Interest of the Director if any, in any other entity in form MBP- 1; Approval of Board of directors by Board Resolution; Approval of Shareholders by shareholders Ordinary Resolution; Intimation of appointment of director to ROC in Form DIR-12 Directors.

DIN is a unique identification number issued to a prospective director by the DIN cell of Ministry of Corporate Affairs (MCA). An individual should hold a DIN before being appointed as a director in any Company.

Digital Signature Certificates (DSC) are the digital equivalent (that is electronic format) of physical or paper certificates. Few Examples of physical certificates are drivers’ licenses, passports or membership cards. Certificates serve as proof of identity of an individual for a certain purpose; for example, a driver’s license identifies someone who can legally drive in a particular country. Likewise, a digital certificate can be presented electronically to prove one’s identity, to access information or services on the Internet or to sign certain documents digitally.

Although, as per the provisions of Section 152 of the CA, 2013, the directors of the Company are required to be appointed by the shareholders of the Company in general meeting, the Board of the Company, if authorised by the AOA of the company can appoint director under following circumstances: Appointment of additional director; Appointment of nominee director; Appointment of alternate director; Appointment of director for filling casual vacancy

Independent Directors are in the limelight as per the Companies Act, 2013. A separate criterion has been established for the companies to have an Independent Director. Basically, we can say that an independent director is a non-executive director of a company who helps the company in improving corporate credibility and governance standards. He/ She does not have any kind of relationship with the company that may affect the independence of his/ her judgment.

The term “Independent Director” has been defined in the Act, along with several new requirements relating to new requirements relating to their appointment, duties, role, and responsibilities. The provisions relating to appointment of Independent directors are contained in Section 149 of the Companies Act, 2013 should be read along with Rule 4 and Rule 5 of the Companies (Appointment and Qualification of Directors) Rules, 2014

Pursuant to the notification of the Ministry of Corporate Affairs (“MCA“) dated October 22, 2019 1, an online data bank for the independent directors (“Data Bank“) has been rolled out by the Indian Institute of Corporate Affairs (“IICA“). All individuals who are proposed to be appointed as an independent director (“ID“) or who are already appointed as an ID on board of companies in India have to register themselves in the Data Bank and then appear for an online proficiency test. This is a new check the box requirement for being appointed as an independent director (“ID“) on the board of company in India.

All companies are required to hold a board meeting atleast once every three months and there must be four board meetings each year.

Quorum is the minimum number of Directors required at the board meeting to validly transact any business. The quorum for a board meeting is usually one third of the total strength of the Directors or two Directors, whichever is higher.

If the quorum required for a Board Meeting is not present, the meeting cannot be held and will automatically be adjourned. A company can define through its Articles of Association the procedure for adjournment for want of quorum.

As per Rule 4 of the Companies (Meetings of the Board and its Powers) Rules, 2014, following matters shall not be considered through video conferencing or other audio visual means:
(i) Approval of annual financial statements;
(ii) Approval of boards report;
(iii) Approval of prospectus;
(iv) Audit Committee Meetings for consideration of financial statement including consolidated financial statement, if any, to be approved by the Board of Directors pursuant to Section 134(1) of the CA, 2013;
(v) Approval of the matter relating to amalgamation, merger, demerger, acquisition and takeover.

However, as per The Companies (Amendment) Bill, 2016, which is yet to be notified, has proposed participation of Directors on certain items at Board Meetings through video conference or other audio visual means if there is quorum through physical presence of Directors.

Section 173 of Companies Act, 2013 does not restrict a company from holding any meeting of its Board of Directors at some other place outside India.

Further, as per Rule 3(6) of the Companies (Meetings of Board and it’s powers) Rules, 2014, with respect to meetings conducted through video conferencing or other audio visual means, provides that the scheduled venue of the meeting as set forth in the notice convening the meeting, shall be deemed to be the place of the said meeting and all recordings of the proceedings at the meeting shall be deemed to be made at such place.

Where all the directors of a company vacate their offices under any of the disqualifications specified in sub-section (1), the promoter or, in his absence, the Central Government shall appoint the required number of directors who shall hold office till the directors are appointed by the company in the general meeting.

The company cannot take loan from outsider (other than from director, relative of director, members, any other company and banks etc).

In the interest of good corporate governance, companies should maintain an arm’s length relationship in all transactions, including Related Party Transactions (RPTs) which are generally seen as an area of conflict of interest and therefore it requires extra caution to avoid abuse of such transactions. Section 188 of the Companies Act, 2013 and Regulation 23 of the Listing Regulations deal with transactions with related parties. The Act provides for approval of all transactions with related parties except with respect to transactions with a wholly owned subsidiary. Directors should be vigilant while approving RPTs.

Sub-section (2) of section 168 provides that the resignation of director shall be effective from the date on which the notice is received by the company or the date, if any, specified by the director in the notice, whichever is later.

Yes, shareholders of the Company may by passing an ordinary resolution in general meeting remove a director, but after giving a reasonable opportunity of being heard pursuant to Section 169 of the CA, 2013. A special notice would be required for passing such resolution. Once shareholders remove a director from the Board, the Board of Directors cannot reappoint him.

The director shall be liable for the acts / transactions occurred during his tenure even after resignation and disassociation with the company.