The rules also empower the company to act sue moat to elect a small shareholders’ director from amongst shareholders

(vi) A nominee of the small shareholders would not be eligible for appointment as whole time director or managing director of the company.

(vii) The tenure of such director shall be a maximum of three years and he need not retire by rotation. The person can be elected for another period of

three years on expiry of his tenure.

(viii) A person shall not hold office as small shareholders’ director in more than two companies.

(ix) Disqualifications. Rule 5 provides that a person shall not be capable of being appointed as small shareholders’ director of a company if

(a) he has been found to be of unsound mind by a Court of competent

jurisdiction and the finding is in force;

(b) he is an undischarged insolvent;

(c) he has applied to be adjudicated as an insolvent and his application is

pending;

(d) he has been convicted by a Court of any offence involving moral turpitude and sentenced in respect thereof to imprisonment for not less than six

months, and a period of five years has not elapsed from the date of expiry of the sentence;

(e) he has not paid any call in respect of shares of the company held by him, whether alone or jointly with others, and six months have elapsed from the

last date fixed for the payment of the call; or

if) an order disqualifying him for appointment as director has been passed by a Court in pursuance of Section 203 and is in force, unless the leave