1. Royal limited is a company listed at Madras Stock Exchange, incorporated on lst January, 2018.The Board of Directors of the company decides to appoint in its Board "Women Director' and the Resident Director.

(i) Explaining the provisions of the Companies Act, 2013, state whether it is mandatory for the
Company to appoint such directors in its Board.

(ii) Would be your answer in case the company is a non-listed company and the Board of Directors decided not to have the Women Director in the company's Board?

(iii) What shall be your answer in case the company in question is not listed at any of the Exchanges. The paid-up share capital of the company is 50 crore and the turnover of the company is 200 Crores. Decide whether the company is mandatorily required to appoint the woman director.

Ans: Requirement of Woman Director and resident Director:

Proviso to Sec. 149(1) read with Rule 3 of Companies (Appointment and Qualification of Directors) Rules, 2014 provides that following class of companies shall appoint at least one women director:

(i)  Every listed company;
(ii) Every other public company having
(a) paid-up share capital of 7 100 Cr. or more; or
(b) turnover of 7 300 Cr or more. 

 The paid-up share capital or turnover as on the last date of latest audited F.S. shall be considered for this purpose.

  • In case of newly incorporated companies covered under prescribed criteria of Rule 3, appointment shall be made within six months from the date of incorporation.
  •  Sec. 149(3) of Companies Act, 2013 provides that every company shall have at least one director who stays in India for a total period of not less than 182 days during the financial year:
Provided that in case of a newly incorporated company the requirement u/s 149(3) shall apply
proportionately at the end of the financial year in which it is incorporated.

Conclusions: Applying the provisions of Sec. 149(1), 149(3) and Rule 3, following conclusions may be drawn:

(i) It is mandatory to appoint women director (as company is a listed company) and resident
director [as required by Sec. 149(3)].

(ii) In case of unlisted company, appointment of women directors is not mandatory provided company is not covered under Rule 3.

(ii) Appointment of woman director is not mandatory as company does not fall under the categories prescribed in Rule 3.