Company law query.


What are the different types of directors? What is the difference between Independent and Non executive Director ?
 

 
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Hello,

Basically, we can say that an independent director is a non- executive director of a company who helps the company in improving corporate credibility and governance standards. He/ She does not have any kind of relationship with the company.

 
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According to “Section 2(34) of Companies Act 2013 ” a director is appointed to the Board of a Company. There are many types of directors which have a different role to play accordingly. Here in this article we will discuss types of directors in a company according to the companies act, 2013.

TYPES OF DIRECTORS

1.) Residential Director: – According to Section 149(3) of Companies Act,2013, Every company should appoint a director who has stayed in India for a total Period of not less than 182 days in the previous calendar year.

2.) Independent Director: – According to Section 149(6) an independent director is an alternate director other than a Managing Director which is known as Whole Time Director Or Nominee Director. According to Rule 4 of Companies (Appointment and Qualification of Directors) Rules,2013 these are the following type of companies which have to appoint minimum 2 independent directors:-
# Public Companies which have Paid-up Share Capital-Rs.10 Crores or More,

# Public Companies which have Turnover- Rs.100 Crores or More,

# Public Companies which have total outstanding loans, debenture, and deposits of Rs. 50 Crores or More.

3.) Small Shareholders Directors: – Small shareholders are eligible to appoint a single director in a listed company.
However, this action needs a proper procedure like handing over a notice to at least 1000 Shareholders or 1/10th of the total shareholders.

4.) Women Director: – As per Section 149 (1) (a), there are certain categories according to which there should be at least one woman as a director on the Board. Such companies are any listed company or any public company having.
There women director include a category of directors that are listed below:

(a) Additional Directors:-
Any Individual can be appointed as Additional Directors by a company under section 161(1) of the New Act.

(b) Alternate Directors:-
As per Section 161(2), a company may appoint, if the articles confer such power on the company or a resolution is passed (if a Director is absent from India for at least three months).

(c) Shadow Director:–
A person who is not the member of Board but has some power to run it can be appointed as the director but according to his/her wish.

The difference between Independent Directors & Non-Executive Directors is illustrated below, have a look for more input.

Non-Independent Director refers to an affiliated member, chairperson or an equivalent, who is nominated or chosen by the affiliated members for the purpose of election at an Annual General Meeting (i.e. AGM) or Members Board meeting for appointment to the Board as a Non-Executive director.

Non-executive directors provide independent oversight and serve on committees concerned with sensitive issues such as the pay of the executive directors and other senior managers; they are usually paid a fee for their services but are not regarded as employees.

The Companies Act, 1956 does not provide us the specific definition of an Independent Director.

However, Independent Directors got recognition through the Companies Act, 2013.
A separate criterion has been established for the companies to have an Independent Director.

Basically, we can say that an independent director is a non-executive director of a company who helps the company in improving corporate credibility and governance standards.

An Independent Director does not have any kind of relationship with the company that may affect the independence of his/ her judgment.
 
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Hello,

Kindly go through the articles below for more input
https://www.lawyersclubindia.com/articles/types-of-directors-under-companies-act-2013-6746.asp

https://www.lawyersclubindia.com/articles/board-of-directors-powers-resignation-6812.asp

Thank you

 
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