Provisions for appointing a Women Director in Private Limited Company

Provisions for appointing a Women Director in Private Limited Company

Companies Act, 2013 not only re-organized the provisions of Companies Act, 1956 but also introduced some new ones. One of them being the appointment of a Women Director in Private Limited Company. Till now there was no such provision but in order to give confidence to women, the new Companies Act provides for appointment of at least one female director.

As per Sub Section (1) of Section 149 of the Act every public company, private company and one-person company needs to have a minimum of 3 directors, 2 directors and 1 director respectively. The company can have a maximum of 15 directors provided it is allowed to have more than 15 which can be done by passing a special resolution.

The appointment of woman director is governed by Companies (Appointment and Qualification of Directors) Rules, 2014 and the second proviso to the sub section (1) of section 149 of the Act. According to the proviso every listed company and every public company having a paid-up share capital of ₹100 crores or more or a turnover of ₹300 crores or more must appoint a female director. The companies that fall under the above mentioned category must comply with the provisions within six months of date of incorporation. In case there is a intermittent vacancy the position of the retiring woman director shall be filled by the Board as soon as possible. The vacancy shall be filled not later than three months from the date of vacancy or the next Board meeting, whichever is later. For the purpose of this provision, turnover and paid up share capital of a company as on the last date of the latest audited financial statements shall be considered and taken into account.

The class of companies required to follow the provisions are prescribed the by Ministry of Corporate Affairs (MCA) and can be amended from time to time. The proviso came into effect from 1st April, 2014. The provision is added to empower women and give them room to do something credible.

Although the provision has been made but the Act is still not clear on the roles and duties of such director. Also, the Act doesn't specify penalties and punishments for non-compliance.

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