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Section 163 of the Companies Act 2013: Option to Adopt Principle of Proportional Representation for Appointment of Directors

SECTION-163 (Option to adopt principle of proportional representation for appointment of directors) under CHAPTER-XI (Appointment and Qualification of Directors) of the Companies Act, 2013

Notwithstanding anything contained in this Act, 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 company in accordance with the principle of proportional representation, whether by the single transferable vote or by a system of cumulative voting or otherwise and such appointments may be made once in every three years and casual vacancies of such directors shall be filled as provided in sub-section (4) of section 161.

Extra Notes for Readers

(1) The Companies Act, 2013 received the assent of the President on the 29th August, 2013 (Published in the Gazette of India, Extraordinary, Part II - Section 1 by Ministry of Law and Justice, Legislative Department on 30th August, 2013) - link

(2) Section 163 of the Companies Act 2013 was notified by MCA Notification S.O. 2754(E) dated 12th September 2013 (w.e.f. 12th September 2013) - link

(3) Further, refer the Companies (Appointment and Qualification of Directors) Rules, 2014 (w.e.f. 1st April 2014) link
[Also check amendments, if any, to the Companies (Appointment and Qualification of Directors) Rules, 2014]

(4) Govt. Companies - MCA Notification G.S.R. 463(E) dated 5th June 2015 - link

Sl. No.
Chapter Number/Section number/Sub-section(s) in the Companies Act, 2013
Exceptions, Modifications and Adaptations
Chapter XI, section 163.
Shall not apply to —
(a) a Government Company in which the entire paid up share capital is held by the Central Government, or by any State Government or Governments or by the Central Government and one or more State Governments;
(b) a subsidiary of a Government company, referred to in (a) above, in which the entire paid up share capital is held by that Government company.

This page was last updated on 29th March, 2017.

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