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Requirement of small shareholders director

'Small shareholders' means a shareholder holding shares of  nominal value of Rs.20,000 or less  ’ Both  Equity and preference  shareholder who is satisfying above requirement will considered.  Every listed company  MAY  have one director.

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Company may appoint small shareholder on its own or on application by small shareholder  A notice in writing is given by  at least 1000 small shareholders or 1/10th of small shareholders , whichever is less.  Notice should be given at least  before 14 days  before general meeting. Notice should contain the name, address, number of shares held of person proposed to be appointed as small shareholder.

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Notice should be signed by the nominee stating     A. his director identification number (DIN),     B. that he is not disqualified to become director,     C. his consent to act as director to company.  If the proposer does not hold any shares, details of shares held need not be mentioned in the notice. A Listed public companies shall elect the small shareholders nominee through a postal ballot.

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It can be appointed for maximum of 3 years and he need not retire by rotation. A person shall not hold office as small shareholders' director in more than two companies at the same time. Person who is small shareholder director in one company cannot be appointed as small shareholder director in second company, if it is in competition or conflict with business.

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It shall not be appointed or associated in any other capacity for a period of 3 years from the date of cessation.  Small shareholders' director is not eligible for appointment as whole time director or managing director. Such director shall be considered as an independent director subject to his giving a declaration of his independence as specified.

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person appointed as small shareholders' director shall vacate the office if       a. Disqualifications as per S.164;       b.  Vacantion  under section 167;      c. the director ceases to meet the criteria of independence as provided in section 149(6)

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Only by ordinary resolution passed in the general meeting after compliance of the procedural requirements of section 169.

Section 151- Small shareholder Director