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.
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?
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
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.
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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