Women Directors under Companies Act 2013

The establishment of Companies Act, 2013 permitted India to have an advanced enactment for development and regulation of corporate area in India. The demonstration was ordered considering the changing monetary and business climate both locally and worldwide to work with business-accommodating corporate regulations, further develop corporate administration standards, upgrades responsibility on the part of corporate and reviewers, raise levels of straightforwardness and secure interests of investors, particularly small investors.

The objective of the Companies Act, 2013 is to give business amicable corporate guideline/ pro-business drives; e-Governance Initiatives; great corporate administration and CSR; enhanced disclosure standards and improved responsibility of the executives.

Appointment of women directors

According to Section 149(1) of the Companies Act, 2013, “Every company shall have a Board of Directors consisting of individuals as directors and shall have—

• A minimum number of three directors in the case of a public company, two directors in the case of a private company, and one director in the case of a One Person Company; and
• A maximum of fifteen directors: Provided that a company may appoint more than fifteen directors after passing a special resolution:

Provided further that such class or classes of companies as may be prescribed, shall have at least one woman director”

The Act further states that under Section 149(2), “Every company existing on or before the date of commencement of this Act shall within one year from such commencement comply with the requirements of the provisions of sub-section (1).”

Therefore, it is mandatory for the companies incorporated under the 2013 Act to appoint at least one women director within 6 months from incorporation and all those companies incorporated under the Companies Act, 1956 to appoint at least one woman director within 1 year from the commencement of the 2013 Act.

Any company incorporated under the Act which

• Is a listed company whose securities are listed in the stock exchange or
• Has a paid up capital of more than 100 crore rupees or more, has to mandatorily appoint at least one woman director.

This comes as fresh change and empowerment for women in the companies.

Qualification of Women Directors

Qualification for a woman to be director in a company incorporated under the Companies Act, 2013 are not mentioned in the Act. A woman director can be appointed during the registration or after incorporation by the Board of Directors or Stakeholders of the company

Procedure for appointment of woman director

The procedure for appointment of women director is same as any other directors appointed under the Act of 2013.

Director identification number: Under section 153 of the Act, “Every individual intending to be appointed as director of a company shall make an application for allotment of Director Identification Number to the Central Government in such form and manner and along with such fees as may be prescribed.”

The woman should file an application under section 153 of the Act for the allotment of Director Identification Number or Director Identification Number to the Central Government. The Central Government then within one month of the application allot Director Identification Number to the individual (section154). The woman director shall inform the company or companies where she is a director about the Director Identification Number within one month of the allotment of Director Identification Number (section 156). The company shall furnish such Director Identification Number of that director to the registrar or any such person or authority as specified by the Central Government within 15 days of receipt of intimation of the Director Identification Number (section 157). If a company fails to do so within prescribed time, shall be punishable with not less than 25000/- rupees which may extend to one lakh.

• Consent as to director: women directors have to give consent in the Form DIR-2 to the registrar within 30 days of her appointment.
• Not disqualified under section 164(2) of the Act: a woman director has to fill Form DIR-8 to intimate that she is not disqualified under section 164(2) of the Companies Act 2013.

Tenure of women directors

A woman director can hold office until next Annual General Meeting from the date of her appointment. She is likewise qualified for look for reappointment at the General Meeting. The tenure of women director is responsible to retirement by pivot like different directors. Like some other directors, a Woman Director can likewise give her resignation any time before the expiry of her term by giving a notification to the company.

Vacancy of women director position.

A woman director can leave the company by

• Resignation
• Removal
• Retirement
• Automatic vacancy.

The board of directors must fill this vacancy of position with 3 months.

Responsibilities of women directors

The responsibilities of women directors are same as other directors. A woman director can go about as an independent director who is answerable for working on corporate validity of the organization and furthermore to further develop administration guidelines of the company. Additionally, women directors can be appointed as a Nominee director who basically takes care of and addresses the interests of the appointee.

Final Word

Women empowerment isn’t something where a woman can only assume a straightforward part in a corporate however ought to be a section the more elevated level of decision making process. Thus the Government has now enabled women to take part as one of the Board Members of the company. This progression towards sexual orientation segregation is invited by many driving companies some of which appointed Woman Director promptly on initiation of Companies Act, 2013.