Board Composition and Independent Directors
Section 149 sets the architecture of the board: minimum and maximum directors, the resident-director requirement, the woman-director mandate, and the definition and tenure of independent directors.
The provision, in plain terms
Every public company: minimum 3 directors; private: 2; OPC: 1; maximum 15 (more via special resolution). Prescribed classes must appoint at least one woman director. Every company must have a director resident in India for at least 182 days in the FY. Listed public companies need at least one-third independent directors (prescribed public companies: at least two). Independent directors must satisfy the independence criteria of 149(6), hold office up to two consecutive five-year terms, are outside the retirement-by-rotation net, and their liability is confined to acts with their knowledge, attributable through Board processes, and with their consent or connivance.
Points worth memorising
- Board size: 3/2/1 minimum (public/private/OPC); 15 maximum, extendable by special resolution.
- Woman director: mandatory for listed companies and public companies with paid-up capital ≥ ₹100 crore or turnover ≥ ₹300 crore.
- Resident director: at least one director staying in India ≥ 182 days in the financial year.
- Independent directors: one-third of the board for listed companies; two for prescribed public companies; two five-year terms max, then a three-year cooling period.
- Independence criteria (149(6)): no pecuniary relationship with the company beyond prescribed limits, no promoter linkage, and prescribed relative restrictions.
How the exam tests it
Board-composition arithmetic and independence criteria are staple MCQs in CA Intermediate Corporate Laws; Final Paper 6 case studies often hinge on whether a director qualifies as independent.
Tested at: intermediate · final
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Talk to usWhich companies must appoint a woman director?
Every listed company, and every other public company with paid-up share capital of ₹100 crore or more or turnover of ₹300 crore or more, must have at least one woman director.
How long can an independent director serve?
Up to two consecutive terms of five years each. Thereafter, they are eligible for reappointment only after a three-year cooling-off period during which they have no other association with the company.