Woman Director in Company

A woman has the ability to make significant contributions to the Board of a Company, owning to their education and ability to multi-task seamlessly. However, the representation of Women on the Board of Indian companies and women entrepreneurship is low. To boost Women participation, the Government has introduced various schemes for promoting women Entrepreneurship and require certain companies to mandatorily have woman Director on the Board. In this article, we review such a requirement with respect to a woman director in a company.

Mandatory Requirement for Woman Director

The Companies Act and Companies Rules require all listed companies and all companies (Private Limited Company or Limited Company) having a turnover of more than Rs.300 crores or having a paid-up share capital of Rs.100 crores to have a Woman Director on the Board. The Woman Director must be inducted into the Board of Directors within six months of the date of incorporation of the Company.

In the case of existing companies, the mandatory requirement for woman director must be fulfilled within one year before 31st March 2015. Further, the Board of Directors must fulfil the intermittent vacancy of a woman Director at the next Board Meeting, not later than three months from the date of the vacancy.

Requirement for Becoming a Director

To become a Director in an Indian Company, the applicant must first obtain a PAN (in case of Indian National) and DIN (Director Identification Number). There are no educational or experience requirement for becoming a Director. Further, no need for the Directors to be experts or have prior experience or knowledge to hold the position of Director.

Also, to become a Director, the person must be over the age of 18 years and must have the ability to contract. There is no requirement in terms of nationality or citizenship or residency requirement. However, to become a Managing Director or a whole-time Director, the person must be over the age of 21 years and not more than 70 years of age. Hence, most women are eligible to become Director of a company, irrespective of experience and qualification.

Appointment of Family Member as Director

In most companies, wives, daughters and sisters of the promoter are appointed as Director of the Company. The appointment of a woman Director who is also a family member is acceptable. However, a Director of a Company is an agent of the Company who must act in the best interest of the Company at all times. Further, as Trustees of the Company, all Directors must hold the company's properties with utmost trust and manage the affairs of the Company for the benefit of the shareholders.

Back to Learn

Frequently Asked Questions

Common questions about Woman Director Requirement in Indian Companies: Key Insights.

According to the Companies Act and Companies Rules, all listed companies and all companies (Private Limited Company or Limited Company) having a turnover of more than Rs.300 crores or a paid-up share capital of Rs.100 crores must have a woman director on the board. The woman director must be appointed within six months of incorporation for new companies, and existing companies had to comply with this requirement by March 31, 2015.

To become a director in an Indian company, an individual must obtain a PAN (for Indian nationals) and a DIN (Director Identification Number). There are no specific educational or experience requirements to become a director. The person must be over 18 years of age and have the ability to contract. There are no nationality, citizenship, or residency requirements, except for managing directors or whole-time directors, who must be between 21 and 70 years old.

Yes, the appointment of a woman director who is also a family member of the promoter, such as a wife, daughter, or sister, is acceptable. However, it is important to note that all directors, regardless of their relationship to the promoter, are agents of the company and must act in the company's best interest at all times.

If a vacancy arises for the position of a woman director, the board of directors must fill the vacancy at the next board meeting, which should be held no later than three months from the date of the vacancy.

No, there are no specific residency or citizenship requirements for becoming a director in an Indian company, except for managing directors or whole-time directors, who must be between the ages of 21 and 70.

As directors of a company, individuals are agents of the company and must act in the company's best interest at all times. They are considered trustees of the company and must hold the company's properties with utmost trust and manage the affairs of the company for the benefit of the shareholders.

Yes, according to the Companies Act and Companies Rules, new companies must appoint a woman director within six months of the date of incorporation.

No, there are no specific requirements for directors to be experts or have prior experience or knowledge related to the company's industry. The only requirements are related to age, obtaining a PAN and DIN, and the ability to contract.

The mandatory requirement for having a woman director on the board is aimed at boosting women's participation in corporate governance and promoting women's entrepreneurship in Indian companies.

Yes, the Companies Act and Companies Rules only specify the minimum requirement of having at least one woman director on the board. Companies are free to have more than one woman director on their board if they choose to do so.