Section-152: Appointment of Directors

Notified Date of Section: 01/04/2014

(3) No person shall be appointed as a director of a company unless he has been allotted the Director Identification Number under section 154 ⁷[or any other number as may be prescribed under section 153.]

(4) Every person proposed to be appointed as a director by the company in general meeting or otherwise, shall furnish his Director Identification Number ⁷[or such other number as may be prescribed under section 153] and a declaration that he is not disqualified to become a director under this Act.

^2&5[(5) A person appointed as a director shall not act as a director unless he gives his consent to hold the office as director and such consent has been filed with the Registrar within thirty days of his appointment in such manner as may be prescribed:]

¹[Provided that in the case of appointment of an independent director in the general meeting, an explanatory statement for such appointment, annexed to the notice for the general meeting, shall include a statement that in the opinion of the Board, he fulfils the conditions specified in this Act for such an appointment.]

^3,4&6[(6) (a) Unless the articles provide for the retirement of all directors at every annual general meeting, not less than two-thirds of the total number of directors of a public company shall—
(i) be persons whose period of office is liable to determination by retirement of directors by rotation; and
(ii) save as otherwise expressly provided in this Act, be appointed by the company in general meeting.
(b) The remaining directors in the case of any such company shall, in default of, and subject to any regulations in the articles of the company, also be appointed by the company in general meeting.
(c) At the first annual general meeting of a public company held next after the date of the general meeting at which the first directors are appointed in accordance with clauses (a) and (b) and at every subsequent annual general meeting, one-third of such of the directors for the time being as are liable to retire by rotation, or if their number is neither three nor a multiple of three, then, the number nearest to one-third, shall retire from office.
(d) The directors to retire by rotation at every annual general meeting shall be those who have been longest in office since their last appointment, but as between persons who became directors on the same day, those who are to retire shall, in default of and subject to any agreement among themselves, be determined by lot.

(e) At the annual general meeting at which a director retires as aforesaid, the company may fill up the vacancy by appointing the retiring director or some other person thereto.

Explanation.—For the purposes of this sub-section, “total number of directors” shall not include independent directors, whether appointed under this Act or any other law for the time being in force, on the Board of a company.

^4&6[(7) (a) If the vacancy of the retiring director is not so filled-up and the meeting has not expressly resolved not to fill the vacancy, the meeting shall stand adjourned till the same day in the next week, at the same time and place, or if that day is a national holiday, till the next succeeding day which is not a holiday, at the same time and place.
(b) If at the adjourned meeting also, the vacancy of the retiring director is not filled up and that meeting also has not expressly resolved not to fill the vacancy, the retiring director
shall be deemed to have been re-appointed at the adjourned meeting, unless—
(i) at that meeting or at the previous meeting a resolution for the re-appointment of such director has been put to the meeting and lost;
(ii) the retiring director has, by a notice in writing addressed to the company or its Board of directors, expressed his unwillingness to be so re-appointed;
(iii) he is not qualified or is disqualified for appointment;
(iv) a resolution, whether special or ordinary, is required for his appointment or re-appointment by virtue of any provisions of this Act; or
(v) section 162 is applicable to the case.]

Explanation.—For the purposes of this section and section 160, the expression “retiring director” means a director retiring by rotation. ]

Exceptions/ Modifications/ Adaptations

1. In case of section 8 company – proviso to Section 152 (5) shall not apply . – Notification dated 5th june, 2015.

2. In case of Government company –  Section 152 (5) shall not apply , where appointment of such director is done by the Central Government or State Government, as the case may be. – Notification dated 5th june, 2015.

3.In case of Government Comapny – Sub-section (6) and (7) of Section 152 shall not apply to :-

(a) a Government Company in which the entire paid up share capital is held by the Central Government, or by any State Government or Governments or by the Central Government and one or more State Governments;

(b) a subsidiary of a Government company, referred to in (a)above, in which the entire paid up share capital is held by that Government company. – Notification dated 5th june, 2015. 

4. In case of Specified IFSC Public Company –Sub-sections (6) and (7) of section 152 shall not apply –  Notification Dated 4th January 2017.

5.In case of Specified IFSC Public Company– In Sub-section (5) of section 152, For the words “thirty days” read as “sixty days”.-  Notification Dated 4th January 2017.

6.In case of Government Company – Sub-section (6) and Sub-Section (7) of Section 152 shall not apply to – Notificatiopn Dated 13th June, 2017.

(a) a Government Company in which the entire paid up share capital is held by the Central Government, or by any State Government or Governments or by the Central Government and one or more State Governments;

(b) a subsidiary of a Government company, referred to in (a)above, in which the entire paid up share capital is held by that Government company)

the following Entry shall be substituted

Sub-section (6) and (7) of Section 152 shall not apply to

(a) a Government company, which is not a listed company, in which not less than fifty-one per cent. of paid up share capital is held- by- the Central Government, or by any State Government or Governments or by the Central Government and one or more State Governments;

(b) a subsidiary of a Government company, referred to in (a) above.”. – Notification Dated 13th June, 2017.

 Amendments 

7. Inserted by The Companies (Amendment)Act,2017 :- Amendment effective from 9th february 2018