Question
Consider the following statements regarding corporate governance and the Board of Directors under Section 149 of the Companies Act, 2013: Statement 1: Every company must have at least one director who is not in the employment of the company. Statement 2: A director should not be a minor; they must be a natural person above 21 years of age. Statement 3: Listed companies must have at least one-third of the board as independent directors. Statement 4: The first director of a company cannot be a corporate entity; only natural persons can be directors. Which statements are correct?
Solution
Section 149 and related provisions address director requirements. Statement 1 is correct—at least one director must not be in employment. Statement 2 is correct—Section 149(1) requires directors to be natural persons of at least 21 years. Statement 3 is correct—listed companies must have one-third independent directors. Statement 4 is incorrect—Section 149(8) permits corporate entities (OCPs, trusts) as directors in specific circumstances. Statements 1, 2, and 3 are correct.
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