Independent Directors and his Role

Definition of Independent Director:

An independent director means a director other than a managing director or a whole-time director or a nominee director who does not have any material or pecuniary relationship with the company/directors. Section 149(6) of the Companies Act, 2013 prescribes the criteria for independent director which are as follows:

• Who in the opinion of the Board, is a person of integrity and possess relevant industrial expertise and experience.
• Such individual shall not be a promoter or related to promoter of the company or its holding, subsidiary or associate company.
• Such individuals must not have any material or pecuniary relationship during the two immediately preceding financial years or during the current financial year with the company or its promoters/directors/holding/subsidiary/ associate company.
• The relatives of such person should not have had any pecuniary relationship with the company or its subsidiaries, amounting to 2% or more of its gross turnover or total income or Rs. 50 lacs or such higher amount as may be prescribed, whichever is less, during the two immediately preceding financial years or in the current financial year.
• who possesses such other qualifications as prescribed in Rule 5 as an independent director shall possess appropriate skills, experience and knowledge in one or more fields of finance, law, management, sales, marketing, administration, research, corporate governance, technical operations or other disciplines related to the company’s business.

Which Companies needs to appoint Independent Director?

Every listed public company shall have at least one-third of the total number of directors as independent directors (fraction is to be rounded off to one). Central Government has prescribed under Rule 4, public companies with specified limits as on the last date of latest audited financial statements mentioned below shall also have at least 2 directors as independent directors:-

1. paid up share capital of Rs. 10 crore or more; or
2. turnover of Rs. 100 crore or more; or
3. in aggregate, outstanding loans/borrowings/ debentures/deposits/ exceeding Rs. 50 crore or more.
4. In case a company covered under this rule is required appoint higher number of independents directors due to composition of its audit committee and then they shall appoint such higher number of independent directors.

 Code of Conduct for an Independent Director:

• The Independent Director shall abide by the rules and regulations laid by the provisions specified in Schedule IV regarding code of conduct.    
• Adherence to these standards by independent directors and fulfillment of their responsibilities in a professional and faithful manner will promote confidence of the investment community, particularly minority shareholders, regulators and companies in the institution of independent directors.
• Code of Conduct includes guidelines of professional conduct, role and functions, duties, manner of appointment, re-appointment, resignation or removal, separate meetings, evaluation mechanism.

Appointment of Independent Director:

• Independent director can be appointed for a term of up to five consecutive years on the Board as per Section 152 of the Companies Act, 2013.
• However, in case of his reappointment for further five year then special resolution passed in general meeting and disclosure of such appointment is made in the Board’s report shall be required.
• Further independent director can be considered for re-appointment after expiration of three years of ceasing to become an independent director but he must not be appointed/associated with the company directly or indirectly in any other capacity during the said period of three years.
• Any tenure of an independent director on the date of commencement of this Act is not considered for the above term.
• Further, in case of independent directors, the explanatory statement relating to their appointment should contain a declaration from the Board that in their opinion, the independent directors satisfy the conditions provided in the Act for such appointment.

Liability of Independent Director:

An independent director and a non-executive director except the promoter or key managerial personnel, shall be held liable only in respect of such acts of omission or commission by a company which had occurred with his knowledge, attributable through Board processes and with his consent or connivance or where he had not acted diligently.

TRADEMARK REGISTRATION

WHAT IS A TRADEMARK?

●    A trade mark is a sign that you can use to distinguish your business’ goods or services from those of other traders.
●    A Trademark generally refers to a “brand” or “logo”.
●    Trademark registration can also be obtained for a business name, distinctive catch phrases, tag-lines or captions.
●    Properly used and promoted, a Trademark may become the most valuable asset of a business. Trademarks such as Coca Cola, HP, Canon, Nike and Adidas serve as an indication of origin of the goods as well as an indication of quality.

WHAT ARE THE ADVANTAGES OF TRADEMARK

Trademark benefit both businesses and consumers. Trademarks allow businesses to build an identity and reputation with customers, and grow or expand business. They allow consumers to take an informed buying decision by searching out familiar brand names and avoid bad buying experiences by avoiding the brands they didn't like.

1. Confers upon the owner the exclusive right to use the brand.
2. Protects hard earned goodwill in the business.
3. Protects your Name / Brand Name from being used in a same or similar fashion, by any other business firm, thus discourages others from cashing on your long built goodwill.
4. Gives your products a status of "Branded Goods".
   To obtain legal relief in respect of infringement(misuse by others) of the trade mark.
5. Power to assign (transfer) the trademark to others for consideration.

Requirements for filing a trademark application:
 

1. The name, address and nationality of the applicant. If the applicant is a partnership firm, the names of all the partners. Also mention whether any minor is a partner.
2. If the applicant is a company, the country or state of incorporation.
3. A list of goods and/or services for which registration is required.
4.  Soft copy of the trademark to be registered.
5. If the mark contains or consists of non-English words, a translation of those words into English is required.
6. Date of first use of the trademark in India, if at all used
7. Power of attorney simply signed by the applicant (no legalization or notarization is required). For Indian clients, power of attorney to be executed in 100 Rs. stamp paper and signed by the applicant. The power of attorney is not required at the time of lodging the application and can be submitted later with no additional cost.

How the symbols (R) and (TM) can be used in India?

Only the proprietor of a registered trademark can use the symbol (R), using the symbol (R) unless the mark has been registered is unlawful in India. Using symbol (TM) with trademark simply means that one claims to be the proprietor of the trademark. There is no prohibition of the use of symbol (TM) in India.

How long does it take to register a Trademark?

Normally, you can start using the (TM) symbol once you have applied for Trademark, but it will take at least one to two years to get a registered trademark. Once your trademark gets registered you can use the (R) symbol.
What are the consequences of not registering your Brand name or Logo?

In India, registration of trademark is not mandatory, but if left unregistered the following problems would be occurred:
 

1. Usage of your Brand name or logo by other business ventures with slight modification and changes to the name and logo.
2. You may have using the Brand name or logo without registering it for many years, but your competitor might register the same Brand name or logo on his name, then chances of getting sued for using his Brand name or logo by your company.
3. Unregistered Brand name or logo always have threat of infringement. Trademark registration protects your Brand name or logo from being infringed.

What is the validity of a trademark registration?
Once the trademark is registered, it is valid for a period of 10 years from the date of application. The registration can then be renewed indefinitely as long as the renewal fees are paid every 10 years.

One Person Company

FORMING A ONE PERSON COMPANY

One Person Company in India:

A One Person Company is type of company registered under the companies act. It was introduced by the new Companies Act, 2013 and become one of the most famous type of company registration especially for small traders and business persons, who wants a corporate identity for their business.

One Person Company means a company owned and managed by only one person and nominee would be appointed in case of death of the sole member.

Features of One Person Company:

1. Formed and registered as per the rules and regulations laid by the Companies Act, 2013.

2. Separate legal status in the eyes of law and distinct from its members.

3. The member of the company enjoys the limited liability, i.e., his personal assets will not be involved if company incurs any loss.

4. A company which has a legal status can be sued and can sue in its own name.

5. One Person Company also enjoys perpetual succession, in case of death of sole owner, the nominee appointed during incorporation undertakes the affairs of the company till another member is appointed.

Requirement for Starting a One Person Company:

1. Minimum two person required, one would be the member and the other one would be the nominee for the company.

2. Minimum authorized and paid up capital for starting a OPC shall be Rs. 1,00,000/-

3. Obtain Digital Signature and Director Identification number for the sole member cum Director of the company.

4. Suggest six names for the company, which should be within the naming guidelines laid by the MCA- Ministry of Corporate Affairs.

5. Must have a valid registered office address proof.

End Note:

A One Person Company, has become a popular type of Company registration, since the management burden and the cost for registering is on the lower side. A small businessmen and traders can avail the advantages of One Person Company.

To know more about registration of one person company, visit www.registeropc.com