Minimum number of directors
Every public company must have at least 3 directors and every private company must have at least 2 directors. The directors of a company collectively are referred as the 'Board of directors' or "Board'. Only Individuals can become directors of a company i.e. a partnership firm or another company cannot be appointed as directors. If no directors have been appointed, then subject to any regulations in the articles of a company, individual subscribers to the memorandum shall be deemed to be the directors of the company, until the directors are duly appointed.

Compulsory Retirement by Rotation
Unless the articles provide for the retirement of all directors at every annual general meeting, at least two-thirds of the total number of directors of a public company, or of a private company which is a subsidiary of a public company must be persons who must be appointed at a general meeting and who must retire at the annual general meeting by rotation.

At every annual general meeting, one-third of such of the directors who are liable to retire at the AGM must shall retire from office. The directors to retire by rotation at every annual general meeting shall be those who have been longest in office since their last appointment.

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 as director. In other words, the retiring director is eligible for re-appointment.

If the place 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 public holiday, till the next succeeding day which is not a public holiday, at the same time and place.

If at the adjourned meeting also, the place 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: -

1. 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;

2. 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:

3. He is not qualified or disqualified for appointment;

4. A resolution, whether special or ordinary, is required for his re-appointment in virtue of any provisions of this Act; or

Right of persons other than retiring directors to stand for directorship

A person who is not a retiring director is eligible for appointment to the office of director at any general meeting, if he or some member intending to propose him has, not less than fourteen days before the meeting, left at the office of the company a notice in writing under his hand signifying his candidature for the office of director along with a deposit of five hundred rupees which must be refunded to such person or, as the case may be, to such member, if the person succeeds in getting elected as a director.

The company must inform its members of the candidature of a person for the office of director by serving individual notices on the members not less than seven days before the meeting. However, it is not necessary for the company to serve individual notices to members if the company advertises such candidature not less than seven days before the meeting in at least two newspapers circulating in the place where the registered office of the company is located, of which one is published in the English language and the other in the regional language of that place.

The above provision will not apply to a private company, unless it is a subsidiary of a public company.

Right of company to increase or reduce the number of directors

A company in general meeting may, by ordinary resolution, increase or reduce the number of its directors within the limits fixed in that behalf by its articles. In the case of a public company or a private company which is a subsidiary of a public company if the increase in the number of directors is to be above the number permitted by the articles, approval of the Central Government is required in case the total number of directors in the company becomes more than 12.

Additional directors
Though directors are normally appointed in a general meeting, the Board of Directors may, if provided by the articles also appoint additional directors. Such additional directors however shall hold office only up to the date of the next annual general meeting of the company. The number of the directors and additional directors together must not exceed the maximum number of directors fixed by the articles.

Appointment and term of office of alternate directors
The Board of directors of a company may, if so authorized by its articles or by a resolution passed by the company in general meeting, appoint alternate director to act for another director during his absence for a period of not less than three months from the State in which meetings of the Board are ordinarily held.

An alternate director cannot hold office for a period longer than that permissible to the original director in whose place he has been appointed and shall vacate office if and when the original director returns to the State in which meetings of the Board are ordinarily held.

Casual Vacancies of Directors
In case of a public company or a private company which is a subsidiary of a private company, if there is any casual vacancy in the office of director before the expiry of his term, the Board of directors may appoint another person as a director at a meeting of the Board. Any person so appointed shall hold office only up to the date up to which the director in whose place he is appointed would have held office if it had not been vacated as aforesaid.

Consent of Director
A director of a public company must give in writing his consent to be appointed as director of the company in the prescribed form 29.

Option to company to adopt proportional representation for the appointment of directors

In order to protect the interests of minorities and granting them representation on the board of directors, the articles of a company may provide for the appointment of not less than two-thirds of the total number of the directors of a public company or of a private company which is a subsidiary of a public company, according to the principle of proportional representation. This can be done by the single transferable vote or by a system of cumulative voting or in any other manner. Such appointments may be once in every three years.

Qualification Shares
The articles of a company may provide that every director must hold a certain minimum number of shares in the company in order to qualify to become a director of the company. Such shares are known as qualification shares. In such cases, a person cannot be appointed as director unless he acquires the said number of qualification shares. Such qualification shares may be acquired within two months after appointment as director. Any provision in the articles of the company shall be void in so far as it requires a person to hold the qualification shares before his appointment as a director or to obtain them within a shorter time than two months after his appointment as such. The nominal value of the qualification shares shall not exceed five thousand rupees, or the face value of one share where it exceeds five thousand rupees.

If, after the expiry of the said period of two months, any person acts as a director of the company when he does not hold the qualification shares, he shall be punishable with fine which may extend to fifty rupees for every day between such expiry and the last day on which he acted as a director.

The provisions pertaining to qualification shares do not apply to: -(a) A company not having a share capital;

(b) A private company;

(c) A company which was a private company before becoming a public company; or

(d) A prospectus issued by or on behalf of a company after the expiry of one year from the date on which the company was entitled to commence business.

Managing Directors

No company can appoint a person as its MD if that person is: -

1. Is an undischarged insolvent, or has at any time been adjudged an insolvent

2. Suspends, or has at any time suspended, payment to his creditors

3. Is, or has at any time been, convicted by a Court of an offence involving moral turpitude.

Change in terms or appointment of MS or whole time directors require Government approval

In the case of a public company or a private company which is a subsidiary of a public company, an amendment of any terms or conditions relating to the appointment of a managing or whole-time director or of a director not liable to retire by rotation, will not have any effect unless approved by the Central Government.

Every public company, or a private company which is a subsidiary of a public company, having a paid-up share capital of Rupees 5 crores or more must appoint a managing or whole-time director or a manager. No appointment of a person as a managing or whole-time director or a manager in a public company or a private company which is a subsidiary of a public company can be made except with the approval" of the Central Government unless such appointment is made in accordance with the conditions specified in Parts I and II of Schedule XII and a return in the prescribed" form is filed within ninety days from the date of such appointment with the Registrar of Companies.

Disqualifications of Directors

The following persons are disqualified from being appointed as director: -

1. A person found to be of unsound mind by a Court of competent jurisdiction and the finding is in force;

2. A person who is an undischarged insolvent

3. A person who has applied to be adjudicated as an insolvent and his application is pending;

4. A person who has been convicted by a Court of any offence involving moral turpitude and sentenced in respect thereof to imprisonment for not less than six months, and a period of five years has not elapsed from the date of expiry of the sentence;

5. A person who has not paid any call in respect of shares of the company held by him, whether alone or jointly with others, and six months have elapsed from the last day fixed for the payment of the call;

6. A person against whom an order disqualifying him for appointment as director has been passed by a Court and is in force, unless the leave of the Court has been obtained for his appointment.

The Central Government may, by notification in the Official Gazette, remove the disqualification mentioned in point 4 above either generally or in relation to any company. It may also remove the disqualification mentioned in point 5 above.

A private company which is not a subsidiary of a public company may, by its articles, provide that a person shall be disqualified for appointment as a director on any grounds in addition to those specified in sub-section.

Restrictions on number of directorships

No person can be director of more than twenty companies. In calculating the number of directorships, the following companies shall be excluded: -

1. A private company which is neither a subsidiary nor a holding company of a public company

2. A unlimited company

3. An association not carrying on business for profit or which prohibits the payment of a dividend

4. a company in which such person is only an alternate director, that is to say, a director who is only qualified to act as such during the absence or incapacity of some other director.

Any person who holds office, or acts, as a director of more than twenty companies in contravention of the foregoing provisions shall be punishable with fine which may extend to five thousand rupees in respect of each of those companies after the first twenty.

Vacation of office by directors

The office of a director shall become vacant in any of the following circumstances :-

1.He fails to obtain within the time specified the requisite number of qualification shares. or at any  time thereafter ceases to hold, the qualification shares

2.he is found to be of unsound mind by a Court of competent jurisdiction

3.He applies to be adjudicated an insolvent

4.He is adjudged an insolvent

5. He is convicted by a Court of any offence involving moral turpitude and sentenced in respect thereof to imprisonment for not less than six months

6. He fails to pay any call in respect of shares of the company held by him, whether alone or jointly with others, within six months from the last date fixed for the payment of the call unless the Central Government has, by notification in the Official Gazette, removed the disqualification incurred by such failure

7. He absents himself from three consecutive meetings of the Board of directors, or from all meetings of the Board for a continuous period of three months, whichever is longer, without obtaining leave of absence from the Board

8. He (whether by himself or by any person for his benefit or on his account), or any firm in which] he is a partner or any private company of which he is a director, accepts a loan, or any guarantee or security for a loan, from the company in contravention of section 295

9. He does not disclose his interest in any transaction in which the company is entering.

10.   He becomes disqualified by an order of Court

11.   He is removed by the members from directorship

12. Having been appointed a director by virtue of his holding any office or other employment in the company, he ceases to hold such office or other employment in the company.

The disqualifications referred to in clauses 4, 5 and 10 above shall not take effect: -

1. For thirty days from the date of the adjudication, sentence or order;

2. Where any appeal or petition is preferred within the thirty days aforesaid against the adjudication, sentence or conviction resulting in the sentence, or order until the expiry of seven days from the date on which such appeal or petition is disposed of; or

3. Where within the seven days aforesaid, any further appeal or petition is preferred in respect of the adjudication, sentence, conviction, or order, and the appeal or petition, if allowed, would result in the removal of the disqualification, until such further appeal or petition is disposed of.

If a, person functions as a director when he knows that the office of director held by him has become vacant on account of any of the aforesaid disqualifications, he shall be punishable with fine which may extend to five hundred rupees for each day on which he so functions as a director.

A private company which is not a subsidiary of a public company may, by its articles, provide that the office of director shall be vacated on any grounds in addition to the aforesaid grounds.

Removal of directors
A company may, by ordinary resolution, remove a director (not being a director appointed by the Central Government) before the expiry of his period of office. However this provision cannot be used to remove a director holding office for life on the 1st day of April, 1952 in a private company. Similarly, directors appointed under the system of proportional representation can also not be removed in this manner.

A Special notice must be given of any resolution to remove a director or to appoint somebody instead of a director so removed at the meeting at which he is removed. On receipt of notice, the company must send a copy thereof to the director concerned, and the director (whether or not he is a member of the company) shall be entitled to be heard on the resolution at the meeting.

Where notice is given of a resolution to remove a director and the director concerned makes with respect thereto representations in writing to the company (not exceeding a reasonable length) and requests their notification to members of the company, the company must send a copy to all members to whom notice of the meeting is to be sent.

If a copy of the representations is not sent as aforesaid because they were received too late or because of the company's default, the director may (without prejudice to his right to be heard orally) require that the representations shall be read out at the meeting.

However, such copies need not be sent and the representations need not be read out at the meeting if, on the application either of the company or of any other aggrieved person, the Company Law Board is satisfied that such provisions are being abused to secure needless publicity for defamatory matter. The Company Law Board may order the company's costs on the application to be paid in whole or in part by the director.

Meetings of the Board of Directors
A meeting of its Board of directors must be held at least once in every three months and at least four such meetings must be held in every year.

Notice of meeting of the Board..
Notice of every meeting of the Board of directors of a company must be given in writing to every director for the time being in India, and at his usual address in India to every other director.

Quorum for meetings of the Board of the Board
The quorum for board meetings is 2 or 1/3 of the total strength of the Board, whichever is greater. Total strength means the total strength of the Board of directors of a company as determined in pursuance of this Act, after deducting therefrom the number of the directors, if any, whose places may be vacant at the time

Interested directors are not to be considered for the purposes of determining quorum. Interested director means any director who has a personal interest in the matter being discussed at the meeting.

Procedure where meeting adjourned for want of quorum
If a meeting of the Board could not be held for want of quorum, then, unless the articles otherwise provide, the meeting shall automatically stand adjourned till the same day in the next week, at the same time and place, or if that day is a public holiday, till the next succeeding day which is not a public holiday, at the same time and place.

Passing of resolutions by circulation
No resolution shall be deemed to have been duly passed by the Board or by a committee thereof by circulation, unless the resolution has been circulated in draft, together with the necessary papers, if any, to all the directors, or to all the members of the committee, then in India and not being less than the quorum fixed for a meeting of the Board or committee and to all other directors at their usual address in India and has been approved by such directors as are then in India or by a majority of such directors entitled to vote on the matter under consideration.