Independent director for maximum two terms

By | October 13, 2015
(Last Updated On: October 13, 2015)

Whether an independent director may continue to be so appointed for a maximum period of 10 years, or whether he can continue to be an  independent director for maximum two terms, even if each such term is less than 5 years.

 Independent director

Answer: MCA vide its clarification no. 14/2014 dated 9th June, 2014 has clarified that while appointment of an ‘Independent Director’ for a term less than five years would be permissible, appointment for any term (whether for five years or less) is to be treated as one term under section 149(10) for the Act.

Further, under section 149(11) of the Act, no person can hold office of ‘ID’ for more than ‘two consecutive terms’. Such a person shall have to demit office after two consecutive terms even if the total number of years of his appointment in such two consecutive terms is less than 10 years. In such a case the person shall be eligible for appointment as ID only after the expiry of the requisite cooling-off period of three years.

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