Section 152: Appointment of directors
This section is for outlining the rules and procedures for appointing directors in a company.
The section, clause by clause
What the section says
In plain terms
(1)Where no provision is made in the articles of a company for the appointment of the first director, the subscribers to the memorandum who are individuals shall be deemed to be the first directors of the company until the directors are duly appointed and in case of a One Person Company an individual being member shall be deemed to be its first director until the director or directors are duly appointed by the member in accordance with the provisions of this section.
If a company's articles do not specify how to appoint the first director, the individuals who subscribed to the company's memorandum will be considered the first directors until others are appointed, and in a One Person Company the sole member will be the first director until a director is appointed.
(2)Save as otherwise expressly provided in this Act, every director shall be appointed by the company in general meeting.
Directors are usually appointed by the company at a general meeting, unless the Act says otherwise.
(3)No person shall be appointed as a director of a company unless he has been allotted the Director Identification Number under section 154 1[or any other number as may be prescribed under section 153].
A person cannot be a director unless they have been given a Director Identification Number.
(4)Every person proposed to be appointed as a director by the company in general meeting or otherwise, shall furnish his Director Identification Number 1[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.
Anyone proposed as a director must give their Director Identification Number and declare they are not disqualified from being a director.
(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:
A newly appointed director cannot start work until they have given their consent to the appointment and this has been filed with the Registrar within 30 days.
provisoProvided 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.
(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—
In a public company, at least two-thirds of directors must be liable to retire by rotation and be appointed at a general meeting, with one-third retiring each year.
(6)(i)be persons whose period of office is liable to determination by retirement of directors by rotation; and
(6)(ii)save as otherwise expressly provided in this Act, be appointed by the company in general meeting.
(6)(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.
(6)(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.
(6)(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.
(6)(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.
explanationExplanation.—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.
(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.
If a retiring director's position is not filled at a meeting, the meeting will be adjourned for a week and if still not filled the retiring director will be deemed re-appointed unless certain conditions apply.
(7)(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—
(7)(b)(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;
(7)(b)(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;
(7)(b)(iii)he is not qualified or is disqualified for appointment;
(7)(b)(iv)a resolution, whether special or ordinary, is required for his appointment or re-appointment by virtue of any provisions of this Act; or
(7)(b)(v)section 162 is applicable to the case.
explanationExplanation.—For the purposes of this section and section 160, the expression “retiring director” means a director retiring by rotation.
The right-hand column is written from the section text, not quoted from it, and it has no legal force. Where the two differ, the left-hand column is the law.
Amendment notes
- 1. Ins. by Act 1 of 2018, s. 47 (w.e.f. 9-2-2018).
- 1. The proviso ins. by Act 1 of 2018, s. 48 (w.e.f. 9-2-2018).
- 2. The words and figures “within the time specified under section 403” omitted by Act 1 of 2018, s. 49 (w.e.f. 7-5-2018).
- 3. Subs. by Act 22 of 2019, s. 24, for sub-section (2) (w.e.f. 2-11-2018).
This section refers to
Referred to by
s. 149 Company to have Board of Directorss. 150 Manner of selection of independent directors and maintenance of databank of independent directorss. 159 Penalty for default of certain provisionss. 160 Right of persons other than retiring directors to stand for directorships. 164 Disqualifications for appointment of director
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Reproduced from the official India Code print for reference. Check the current text on India Code before you rely on it, and read the section alongside its Rules. Nothing here is legal advice.