Chapter XI - Appointment and Qualifications of Directors
Section 160
Section 160: right of non-retiring persons to stand for directorship
A person who is not a retiring director can stand for appointment at a general meeting if a written notice of candidature, with a deposit, is left at the registered office at least fourteen days before the meeting.
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This article is for general information. Refer to the Companies Act, 2013 official text for the official provisions. If you need professional advice for your situation, contact Bizeneed.
Statutory text
Bare law
(1) A person who is not a retiring director in terms of section 152 shall, subject to the provisions of this Act, be eligible for appointment to the office of a director at any general meeting, if he, or some member intending to propose him as a director, has, not less than fourteen days before the meeting, left at the registered office of the company, a notice in writing under his hand signifying his candidature as a director or, as the case may be, the intention of such member to propose him as a candidate for that office, along with the deposit of one lakh rupees or such higher amount as may be prescribed which shall be refunded to such person or, as the case may be, to the member, if the person proposed gets elected as a director or gets more than twenty-five per cent. of total valid votes cast either on show of hands or on poll on such resolution. Provided that requirements of deposit of amount shall not apply in case of appointment of an independent director or a director recommended by the Nomination and Remuneration Committee, if any, constituted under sub-section (1) of section 178 or a director recommended by the Board of Directors of the Company, in the case of a company not required to constitute Nomination and Remuneration Committee. (2) The company shall inform its members of the candidature of a person for the office of director under sub-section (1) in such manner as may be prescribed.
Introduction
Section 160 opens directorship elections to persons other than directors retiring by rotation under section 152. The candidate, or a member proposing them, leaves a written notice at the registered office not less than fourteen days before the meeting, with a deposit of one lakh rupees or a higher prescribed amount.
The deposit is refunded if the candidate is elected or gets more than twenty-five per cent. of the total valid votes cast. Since 9 February 2018, no deposit is required for an independent director, or for a director recommended by the Nomination and Remuneration Committee or, where a company need not have one, by the Board.
Key takeaways
Fourteen days’ notice
The written notice must reach the registered office not less than fourteen days before the meeting.
Deposit and refund
One lakh rupees or a higher prescribed amount, refunded on election or more than twenty-five per cent. of valid votes.
Deposit exemptions
Since 9 February 2018, no deposit for independent directors or NRC-recommended or Board-recommended candidates.
Lodge the notice of candidature
The candidate, or a member intending to propose them, leaves at the registered office a notice in writing under their hand signifying the candidature or intention, not less than fourteen days before the general meeting. The provision applies subject to the other provisions of the Act.
- India Code — consolidated Companies Act, 2013, section 160
- eGazette — MCA notification S.O. 902(E), 26 March 2014 (commencement from 1 April 2014)
- eGazette — Companies (Amendment) Act, 2017 (No. 1 of 2018)
- eGazette — MCA notification S.O. 630(E), 9 February 2018 (commencement of Act 1 of 2018 provisions)
- eGazette — MCA notification G.S.R. 464(E), 5 June 2015 (exceptions and modifications for private companies under section 462)
- eGazette — MCA notification G.S.R. 583(E), 13 June 2017 (amending G.S.R. 464(E); paragraph 2A filing condition)
Deposit and refund
The notice is accompanied by a deposit of one lakh rupees or a higher prescribed amount. It is refunded to the person, or to the member, if the candidate is elected or gets more than twenty-five per cent. of the total valid votes cast, on a show of hands or on a poll.
The proviso inserted by section 50 of the Companies (Amendment) Act, 2017, in force from 9 February 2018 under S.O. 630(E), removes the deposit requirement for an independent director, a director recommended by the Nomination and Remuneration Committee constituted under section 178(1), or, in a company not required to constitute that committee, a director recommended by the Board.
Inform members
Under sub-section (2), the company informs its members of the candidature in the prescribed manner. The Act leaves the detail to rules (“as may be prescribed”). Read the current rules made under this Chapter, as published by the Ministry of Corporate Affairs, for forms, fees and procedure before acting.
Private companies
For a private company, G.S.R. 464(E) of 5 June 2015 directs that section 160 shall not apply. Since G.S.R. 583(E) of 13 June 2017, that relief is available only to a private company that has not defaulted in filing its financial statements under section 137 or its annual return under section 92 with the Registrar.
Practical preparation
Check the date of the meeting and count back fourteen days; confirm the notice is in writing under the hand of the candidate or proposing member; check whether a deposit exemption applies; collect the deposit if not; inform members as prescribed; refund the deposit if the candidate is elected or crosses twenty-five per cent. of valid votes.
Practical checklist
Do
- Record the date the notice was received at the registered office.
- Check the deposit exemptions before asking for a deposit.
Avoid
- Do not accept a notice received less than fourteen days before the meeting as valid for that meeting.
- Do not keep the deposit where the refund conditions are met.
Illustrative example
Hypothetical: shareholder nominee
A member of a public company wants to propose an outside candidate at the annual general meeting.
Timing
Leave the signed notice at the registered office at least fourteen days before the meeting.
Deposit
Pay one lakh rupees, or the higher prescribed amount, since no exemption applies.
Result
If the candidate gets more than twenty-five per cent. of valid votes, the deposit is refunded even if not elected.
Outcome
- The candidate is validly before the meeting, and the deposit outcome depends on the vote share.
Glossary
- Retiring director
- A director retiring by rotation in terms of section 152.
- Nomination and Remuneration Committee
- The board committee constituted under section 178(1), where required.
Frequently asked questions
When is the deposit refunded?
If the candidate is elected or gets more than twenty-five per cent. of the total valid votes cast on the resolution.
Does a private company have to follow section 160?
G.S.R. 464(E) of 5 June 2015 says section 160 does not apply to a private company. Since 13 June 2017, this applies only if the company has not defaulted in filing its financial statements or annual return.
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Contact BizeneedLast updated 11 October 2026