Section: Section 149(6) of the Companies Act, 2013
Purpose: To ensure that a company has a fair representation of independent directors on its board of directors and to promote transparency and accountability.
Applicability: This section is applicable to all companies having a paid-up share capital of Rs. 10 crore or more or turnover of Rs. 100 crore or more or having outstanding loans, debentures or deposits of Rs. 50 crore or more.
Timeline: The company should have at least one-third of its board as independent directors within one year from the commencement of this section.
Exemption: This section is not applicable to a government company or a wholly-owned subsidiary.
Penalty: If a company fails to comply with this section, it will be liable to a penalty of Rs. 1 crore or twice the amount of the turnover of the company, whichever is lower. The company's directors may also face imprisonment for a term up to one year or a fine ranging from Rs. 50,000 to Rs. 5 lakh.
Due date: The company should comply with this section within one year from the commencement of this section.
Forms: No specific form is required for compliance with this section.
Reporting authority: The company is required to report its compliance with this section in its annual report.
