Minimum and Maximum Number of Directors

State the provisions of the Companies Act, 1956 relating to the minimum and

maximum number of directors that a company can have. How can the number of directors be increased or reduced?

5tns. Section 252 provides that every public company must have at least 3 directors and every private company must have at least 2 directors.

A public company having

(a) ,a paidup capital of five crore rupees or more;

(b) one thousand or more small shareholders;

may have a director elected by such small shareholders in the manner as may be prescribed...

For the purposes of this sub-section “small shareholder” means a shareholder holding shares of nominal value of twenty thousand rupees or less in a

public company to which this Section applies.

This is the minimum legal requirement as to the number of directors. The Articles of a company may, and usually do, fix the minimum and maximum

number of directors of its Board. For instance, the Articles may fix 6 as the minimum and 10 as the

maximum number of directors for the Board. .

For the purpose of maximum limit fixed by the Articles, directors appointed by the Central Government under Section 408 of the Act or by the Company

Law Board under Section 397 or 398 of the Act are not to be taken into account. Similarly, nominee directors appointed by the public financial institutions

are also not to be counted within the maximum limit fixed by the Articles.

Increase or Reduction in the Number of Directors [Sees. 258 and 259]

A company in general meeting may, by ordinary resolution, increase or reduce the

number of its directors within the limits fixed in that behalf by its Articles.

In certain cases, the increase in number of directors also requires the approval 6f the Central Government. Section 259 provides that if a public company,