Woman Director in Company
Woman Director in Company
A woman has the ability to make significant contributions to the Board of a Company, owning to their education and ability to multi-task seamlessly. However, the representation of Women on the Board of Indian companies and women entrepreneurship is low. To boost Women participation, the Government has introduced various schemes for promoting women Entrepreneurship and require certain companies to mandatorily have woman Director on the Board. In this article, we review such a requirement with respect to a woman director in a company.
Mandatory Requirement for Woman Director
The Companies Act and Companies Rules require all listed companies and all companies (Private Limited Company or Limited Company) having a turnover of more than Rs.300 crores or having a paid-up share capital of Rs.100 crores to have a Woman Director on the Board. The Woman Director must be inducted into the Board of Directors within six months of the date of incorporation of the Company.
In the case of existing companies, the mandatory requirement for woman director must be fulfilled within one year before 31st March 2015. Further, the Board of Directors must fulfil the intermittent vacancy of a woman Director at the next Board Meeting, not later than three months from the date of the vacancy.
Requirement for Becoming a Director
To become a Director in an Indian Company, the applicant must first obtain a PAN (in case of Indian National) and DIN (Director Identification Number). There are no educational or experience requirement for becoming a Director. Further, no need for the Directors to be experts or have prior experience or knowledge to hold the position of Director.
Also, to become a Director, the person must be over the age of 18 years and must have the ability to contract. There is no requirement in terms of nationality or citizenship or residency requirement. However, to become a Managing Director or a whole-time Director, the person must be over the age of 21 years and not more than 70 years of age. Hence, most women are eligible to become Director of a company, irrespective of experience and qualification.
Appointment of Family Member as Director
In most companies, wives, daughters and sisters of the promoter are appointed as Director of the Company. The appointment of a woman Director who is also a family member is acceptable. However, a Director of a Company is an agent of the Company who must act in the best interest of the Company at all times. Further, as Trustees of the Company, all Directors must hold the company’s properties with utmost trust and manage the affairs of the Company for the benefit of the shareholders.