Independent director as per companies bill, 2011

This query is : Resolved

sreenivasa.bhat.s

sreenivasa.bhat.s (Querist)
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27 July 2012 can a company be appoint an Independent Director as consultant say Legal/Technical, having vast expertise in the feild, without any monitory benefit other than Sitting Fees (ie, rendering service to the company for free of cost as consultant)??

Kindly post your valuable comments in the light of Companies Bill, 2011 as presented in the Parliament.

Kindly quote case laws, if any, on the subject

CS Divya Sorayan

CS Divya Sorayan (Expert)
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28 July 2012 under Companies Bill, 2011,
Concept of independent directors
Introduced for the first time in Company Law: [Clause 149]
o All listed companies are required to appoint independent directors.
o Such other public companies as may be prescribed by the Central
Government shall also be required to appoint independent directors.
o At least one-third of the Board of such companies should comprise
independent directors.
o Nominee director appointed by any institution, or in pursuance of any
agreement, or appointed by any Government to represent its
shareholding shall not be deemed to be an independent director.
Only an independent director can be appointed as alternate director to
an independent director [first proviso to Clause 161(2).
o The Independent directors shall abide by a code provided in Schedule
IV to the Bill.
o Independent directors shall hold office upto two consecutive terms. One
term is upto five consecutive years.
o Eligible for appointment in same company after cooling period of three
years.
As per ur query, the indepen. direc. if appointed as consultant etc..will lead to his participation in day to day activities n wil no longer remain independent. hence i think its not possible.

sreenivasa.bhat.s

sreenivasa.bhat.s (Querist)
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29 July 2012 Thank U Mam... but our company is thinking to appoint him as an adviser, ie for technical doubts as he has vast knowledge and expertise in that field... moreover, he is ready to render the service free of cost.

While refering to Clause 149, 150 of Companies Bill, 2011, it is clear that
there should not be any monitory relationship between company and ID.

In our case also, apart from the Sitting Fees there is no other monitory transactions are exist. Bill says only about monetory benefits, so still doubt is pending.......

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