Detailed Analysis of Section 162 of Companies Act 2013

Detailed Analysis of Section 162 of Companies Act 2013 ( Appointment of directors to be voted individually) to understand the section with updated notification till date in a better way to enhance knowledge and effectively apply in the practical problems.

Section 162(1) of companies act 2013

Two or more directors of a company cannot be elected as directors by a passing single resolution at the general meeting. i.e. every director shall be appointed with separate resolution.

An exception to the above provision, two or more directors can be appointed as directors by a passing single resolution if a proposal to move such above resolution (i.e. Appointing two or more directors by single resolutions) has first been agreed to at general meeting without any vote being cast against it.

Section 162(2) of companies act 2013

If a resolution moved in contravention to subsection (1) of section 162 of the companies act 2013 shall be void whether or not any objection was taken when it was moved.

Exemptions

Sections 162 of the companies act 2013, exempts

  • A government company in which entire paid-up capital held by Central Government, or by any State Government or Governments or partly by one or more State Government or Central Government.
  • Wholly owned subsidiary (100% holding) of the above government company
  • Private companies

Provided such exemption is available to the above companies if they are regular in filing its financial statements as per section 137 or annual return as per section 92 of the company act 2013.

Important:

Here, without any vote being cast against it, meaning that who remain silent i.e. don’t vote even they present in that meeting can’t be counted for checking vote against it.

For example: If 10 members present in the meeting 8 members vote in favour and others 2 don’t vote.

Thus, in this case, the above resolution is passed, and moving of resolution for the appointment of two or more directors is further valid.

Refer section 164 of the companies act 2013- click here

Refer section 167 of the companies act 2013- click here

Refer section 160 of the companies act 2013- click here

 

section 162 of companies act 2013
section 162 of companies act 2013

Priyansh Minocha

Priyansh Minocha is C.E.O and Director at Amonest India Private Limited and Founder at Casolutionsglobal

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