written by khatabook | December 6, 2022

Role Of Woman Director: Independent Director (Company Law Regime)

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Table of Content


Women empowerment is not something where a woman can merely play a simple role in a corporation but should be a part of the higher level of the decision-making process. The Director contributes to the policy-making and smooth functioning of a company. Any individual who wishes to hold the position of Director in an Indian company must first obtain Director Identification Number (DIN), a unique identification number for each Director. 

Did you know? A company can be fined up to rupees ₹5 lakh for non-compliance with the provision of appointment of a woman director.

Section 149(1) of the Companies Act :Woman Director

The Companies Act 2013 makes it mandatory for listed companies to appoint at least one woman director. In case of non-compliance, the erring company will be fined ₹10,000. If no amendments are made, there will be a further fine of ₹10,000 per day till it continues. 

Role Of  Woman Director

As per the provisions mentioned u/s 149(1) of the Companies Act, 2013, the specified companies must have a minimum of one woman director. 

Both a private company and a public company must appoint a minimum of one woman director if the following criteria are met:

  • If the securities of the company are listed on any Stock Exchange.
  • If the company has a paid-up capital of ₹100 crores or more and a turnover of ₹300 crores or more. 

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Appointment of Woman Director

The appointment of a woman director can be made when registering a company or after its incorporation. The proposed woman director is required to submit her consent to act as a director in the company in the prescribed Form DIR-2 and file intimation about her disqualification in Form DIR-8 to the company.

Director Identification Number

If the proposed director does not have a director identification number, then the companies must apply for the DIN for the director. This must be attached to the form DIR- 3. In case the appointment of a woman director is made during the company's incorporation process, the DIN will be generated with the incorporation certificate. The DIN allotted can be used for a lifetime. Any adult can apply for and obtain a DIN. 

Consent to Act as Director

If a woman director is appointed in an existing company, The consent in the form DIR – 2 must be submitted to the Registrar of Companies within 30 days of appointment.

Process of Appointment of a Woman Director

The process to appoint a woman director is mentioned below.

  • The proposed woman director must submit her consent as prescribed in form DIR – 2 to hold the company's director post. 
  • A general meeting must be held to obtain shareholders' approval for the appointment of the woman director by passing a resolution.
  • In case the appointment is in a listed company, the Stock Exchange should be apprised about the general meeting proceedings within 24 hours from the conclusion of the meeting. It must also be posted on the website within two working days. 
  • After the resolution is passed in the general meeting, the company must file the following forms with ROC.
  • Form MGT-14 within 30 days of passing the resolution.
  • Form DIR-12 which mentions the particulars of the appointment within 30 days of the appointment.
  • The entries must also be made in the director and key managerial personnel register.
  • Also, the register of contracts should be updated accordingly.

The vacancy of a woman director should be filled up within 3 months or the next board meeting, whichever is earlier. 

A woman director can either be an executive director or a non-executive director.

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Tenure of Women Directors

The woman director is appointed until the next annual general meeting from the appointment date. She is eligible for reappointment at the next general meeting. According to section 152(6) of the Act, a woman director, like other directors, is liable to retirement by rotation. She can also resign by providing notice to the company.

Penalty for Non-Compliance of Appointment of Woman Director

Section 203(5) of the groups Act, 2013 prescribes a penalty of 50,000 and 1,000 in step a day for continuing offense for each director. No specific penalty is mentioned under the Companies Act 2013 so the penalty u/s172 of the Act is applicable in such cases. 

When Should a Woman Director Be Appointed?

 

Description

Time limit for appointment

If the company is a listed company

6 months from the date of incorporation

If it is a public company having a paid-up share capital of ₹100 crores or more

6 months from the date of incorporation

A company having a turnover of ₹300 crores or more

1 year from the date of commencement of Companies Act 2013

Intermittent vacancy for the position of a woman director

Within 3 months from the date of the vacancy.

Role of Women Director 

The duties and responsibilities of a woman director are similar to those of other directors of companies.

  • The director should comply with the articles of the company
  • The director should act in the best interest of the company and the stakeholders
  • The director should not take any advantage of their position in the company
  • The director cannot assign their office to any other person and is prohibited from doing so

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Conditions for Appointing Directors

 These have been provided under section 166 of the Companies Act. According to the section

  • She should be between 25 - 70 years of age.
  • The candidate should not have been imprisoned/fined under any statutes. 
  • They should not have been detained/convicted under the conservation of foreign exchange and prevention of smuggling Act, of 1974
  • If the company approves the appointment of the director by a special passing resolution, then the upper age limit of 70 years will not be applicable.
  • She should be a resident of India.

Conclusion

The Companies Act 2013 makes it mandatory for specified companies to appoint a woman director. The duties and responsibilities of a woman director are similar to those of the company's other directors. Section 203(5) of the groups Act, 2013 states a penalty of 50,000 and 1,000 in step a day as an offense for each director.

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FAQs

Q: When does a company require to appoint a woman director?

Ans:

As per the provisions mentioned u/ s 149(1) of the Companies Act, 2013 the specified companies must have at least one woman director if the following criteria are met:

  • If the securities of the company are listed on any Stock Exchange.
  • If the company has a paid-up capital of ₹100 crores or more and a turnover of ₹ 300 cores or more. 

Q: What is the qualification required for women directors?

Ans:

According to the Companies Act, 2013 an individual to be appointed as a director of a company does not require any educational qualification or work experience. Hence, unless the articles of the company include any requirement for appointment to the post of director, the candidate does not have to fulfill any conditions. Also, she does not have to be a shareholder unless she desires to do so.

Q: What is the tenure of women directors?

Ans:

The woman director is appointed till the next annual general meeting from the date of appointment. She is eligible for reappointment at the next general meeting. According to section 152(6) of the Act, a woman director like other directors, is liable to retirement by rotation.

Q: What is the Penalty for Non-Compliance with the Appointment of a Woman Director?

Ans:

There is no specific penalty mentioned under the Companies Act 2013 so the penalty u/s172 of the Act is applicable in such cases.

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The information, product and services provided on this website are provided on an “as is” and “as available” basis without any warranty or representation, express or implied. Khatabook Blogs are meant purely for educational discussion of financial products and services. Khatabook does not make a guarantee that the service will meet your requirements, or that it will be uninterrupted, timely and secure, and that errors, if any, will be corrected. The material and information contained herein is for general information purposes only. Consult a professional before relying on the information to make any legal, financial or business decisions. Use this information strictly at your own risk. Khatabook will not be liable for any false, inaccurate or incomplete information present on the website. Although every effort is made to ensure that the information contained in this website is updated, relevant and accurate, Khatabook makes no guarantees about the completeness, reliability, accuracy, suitability or availability with respect to the website or the information, product, services or related graphics contained on the website for any purpose. Khatabook will not be liable for the website being temporarily unavailable, due to any technical issues or otherwise, beyond its control and for any loss or damage suffered as a result of the use of or access to, or inability to use or access to this website whatsoever.

Disclaimer :
The information, product and services provided on this website are provided on an “as is” and “as available” basis without any warranty or representation, express or implied. Khatabook Blogs are meant purely for educational discussion of financial products and services. Khatabook does not make a guarantee that the service will meet your requirements, or that it will be uninterrupted, timely and secure, and that errors, if any, will be corrected. The material and information contained herein is for general information purposes only. Consult a professional before relying on the information to make any legal, financial or business decisions. Use this information strictly at your own risk. Khatabook will not be liable for any false, inaccurate or incomplete information present on the website. Although every effort is made to ensure that the information contained in this website is updated, relevant and accurate, Khatabook makes no guarantees about the completeness, reliability, accuracy, suitability or availability with respect to the website or the information, product, services or related graphics contained on the website for any purpose. Khatabook will not be liable for the website being temporarily unavailable, due to any technical issues or otherwise, beyond its control and for any loss or damage suffered as a result of the use of or access to, or inability to use or access to this website whatsoever.