Companies Act Section 160 — Right of persons other than retiring directors to stand for directorship
CHAPTER XI APPOINTMENT AND QUALIFICATIONS OF DIRECTORS
Commercial / Corporate
Summary
Sub-section (1) states that a person who is not a retiring director under section 152 can still be considered for appointment as a director at a general meeting, provided that either the person themselves, or a member who intends to propose them, leaves a written notice at the company's registered office at least fourteen days before the meeting. This notice must be signed and state the person's candidacy, or the member's intention to propose them, and must be accompanied by a deposit of one lakh rupees or a higher amount as may be prescribed. The deposit is refunded to the person or the member if the proposed person is elected as a director, or if they receive more than twenty-five percent of the total valid votes cast on the resolution, whether by show of hands or by poll.
The proviso to sub-section (1) says that the requirement to deposit the amount does not apply when the appointment is of an independent director, or a director recommended by the Nomination and Remuneration Committee constituted under sub-section (1) of section 178, or a director recommended by the Board of Directors in a company that is not required to constitute such a committee.
Sub-section (2) states that the company must inform its members about the candidature of a person for the office of director under sub-section (1), in the manner that may be prescribed.
Official Text
(1) A person who is not a retiring director in terms of section 152 shall, subject to the provisions of this Act, be eligible for appointment to the office of a director at any general meeting, if he, or some member intending to propose him as a director, has, not less than fourteen days before the meeting, left at the registered office of the company, a notice in writing under his hand signifying his candidature as a director or, as the case may be, the intention of such member to propose him as a candidate for that office, along with the deposit of one lakh rupees or such higher amount as may be prescribed which shall be refunded to such person or, as the case may be, to the member, if the person proposed gets elected as a director or gets more than twenty-five per cent. of total valid votes cast either on show of hands or on poll on such resolution. 2[Provided that requirements of deposit of amount shall not apply in case of appointment of an independent director or a director recommended by the Nomination and Remuneration Committee, if any, constituted under sub-section (1) of section 178 or a director recommended by the Board of Directors of the Company, in the case of a company not required to constitute Nomination and Remuneration Committee.]
(2) The company shall inform its members of the candidature of a person for the office of director under sub-section (1) in such manner as may be prescribed.