Skip to content

CS Executive · Company Law and Practice · Directors

Kaveri Textiles Ltd proposes to appoint Mr. Rao, selected from the data bank, as an independent director. Which statement correctly describes the approval required for this appointment under Section 150?

The appointment must be approved by the company in general meeting. Being selected from the data bank does not remove this requirement; the members must approve the appointment, so a Board resolution alone or any outside certificate would not be sufficient.

  1. AIt needs only a Board resolution, since the person comes from the data bank
  2. BIt must be approved by the company in general meetingCorrect
  3. CIt needs only the approval of the Central Government
  4. DIt needs only a certificate from the body maintaining the data bank

Explanation

Section 150(2) states that the appointment of an independent director shall be approved by the company in general meeting, as provided in Section 152(2). Selection from the data bank does not replace this approval, so a Board resolution alone is not enough.

Did you get it right without looking?

One question tells you little. A timed set on Directors shows your real accuracy, how long you take and where you lose marks.

Practise DirectorsFree diagnostic mock

More Directors questions