1.Check whether your company is a listed public limited company. Whether it has received notice from small shareholders or suo moto proposes to appoint a director elected by small shareholders.
2.Your company needs to comply with rule 7 of the companies qualification and appointment of directors rules 2014 in electing a small shareholder director. The nominal value is not more than Rs.20,000.
3.Keep in mind that while appointing a small shareholders director, your company may either act suo motu. Such director between small shareholders or upon the notice of 1000 small shareholders or from not less than one tenth of the total small share holders. The proposed name of a person to be a director of your company. The proposed appointee may or may not be a shareholder of your company.
4.Check whether your company nominee director is elected by the small shareholders has obtained Director Identification Number (DIN).
5.Where small shareholders of your company are proposing a persons name to be elected as a director. See that the notice of their intention for such proposal is left with your company with in 14 days before the meeting under the signature of the small shareholders proposing the name, specifying name, shares held, address, and folio number.
6.The person whose name has been proposed for the post of small shareholders, directors has signed and filed with your company his consent to act as a director, in writing in e-Form DIR-2 and DIR-8 confirming that he is not disqualified from appointment as a director.
7.Convene a board meeting after giving notices to the directors of your company as per section 173 of the 2013 act. It is to take the decision of the requirement of the same appointment.
8.The number of directors including the director elected by the small share holders of our company does not exceed the number of directors fixed by yours Articles of Association.
9.Issue notices of 21 days before the date of the general meeting declaring the ordinary resolution with suitable informative statement.
Appoint a director
10.The resolution of appoint a nominee director under section 151 of the 2013 act is passed only through postal ballot.
11.Hold the general meeting and have the director elected by simple majority by the small shareholders of your company, by passing ordinary resolution.
12.The tenure of small shareholders’ director is for a maximum period of 3 years except that he need not have to retire by rotation.
13.The same person cannot be elected again on the expiry of his tenure.
14.Send three copies of the notice and a copy of the proceedings of the general meeting to the stock exchange of your company shares are listed.
15.File e-Form No.DIR-12 along with his consent in Form DIR-2 by the company within 30 days with the concerned ROC and it is prescribed under the companies (Registration Offices and Fees) Rules 2014.
16.Make necessary entries in the Register of Directors and key managerial personnel and their shareholdings.
17.Promptly notify to the stock exchange with which the shares of your company are listed the change in the company’s directors.
18.Treat the small shareholders’ director appointed as above as director for all other purposes.
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