Betsmove Platformuna Genel Bakış ve Erişim Rehberi

Compliance Requirement of Independent Directors

1. As per Section 149(4):

• • Every listed public company must have at least one-third of the total number of directors as Independent Directors.
  • Any fraction in the one-third requirement is rounded off as one.
  • The Central Government may also prescribe the minimum number of Independent Directors for certain classes of unlisted public companies.

As per Companies (Appointment and Qualification of Directors) Rules, 2017:

The following class or classes of companies shall have at least two directors as independent directors –

(i) the Public Companies having paid up share capital of ten crore rupees or more; or

(ii) the Public Companies having turnover of one hundred crore rupees or more; or

(iii) the Public Companies which have, in aggregate, outstanding loans, debentures and deposits, exceeding fifty crore rupees:

• • In case a company covered under this rule is required to appoint a higher number of independent directors due to composition of its audit committee, such higher number of independent directors shall be applicable to it
  • Any intermittent vacancy of an independent director shall be filled-up by the Board at the earliest but not later than immediate next Board meeting or three months from the date of such vacancy, whichever is later
  • Where a company ceases to fulfil any of three conditions laid down in sub-rule (1) for three consecutive years, it shall not be required to comply with these provisions until such time as it meets any of such conditions;

This provision ensures adequate independent oversight in companies where public interest is significantly involved.

      2. Timeline for Compliance (Section 149(5))

Companies existing on or before the commencement of the Companies Act, 2013 were required to:

• • Comply with the Independent Director requirements within one year from the commencement of the Act, or
  • From the date of notification of applicable rules, whichever was later.

      3. Code of Conduct (Section 149(8) & Schedule IV)

Independent Directors and companies must comply with Schedule IV, which lays down:

• • Guidelines of professional conduct,
  • Roles and functions,
  • Duties and evaluation mechanisms.

Schedule IV reinforces ethical leadership and accountability.

      4. Remuneration of Independent Directors (Section 149(9))

Independent Directors:

Are not entitled to stock options

May receive:

• • Sitting fees (Section 197(5)),
  • Reimbursement of expenses,
  • Profit-linked commission approved by members.

Where profits are inadequate or absent, remuneration may be paid as per Schedule V.

      5. Tenure and Reappointment (Section 149(10) & (11))

• • An Independent Director may hold office for up to 5 consecutive years.
  • Reappointment requires:
    • Special Resolution, and
    • Disclosure in the Board’s Report.
  • Maximum tenure:
    • Two consecutive terms.
  • Cooling-off period:
    • After two terms, a 3-year cooling-off period
    • During this period, the individual cannot be associated with the company in any capacity.

Tenure prior to commencement of the Act is excluded from term calculation.

       6. Liability of Independent Directors (Section 149(12))

Independent Directors and certain non-executive directors are liable only when:

• • The act or omission occurred with their knowledge, attributable through Board processes, and
  • With their consent, connivance, or
  • Due to lack of diligence.

This protection encourages professionals to take up Independent Director roles without fear of undue liability.