Section 151 of CA 2013 : Section 151: Appointment Of Director Elected By Small Shareholders

Explanation using Example

Imagine a publicly traded company, XYZ Corp., listed on a stock exchange. XYZ Corp. has a diverse shareholder base, including both large institutional investors and numerous small shareholders who each hold shares worth less than twenty thousand rupees. To ensure that the interests of these small shareholders are adequately represented in the company's decision-making process, the company decides to allow the election of one director specifically by and for these small shareholders.

In practice, this might involve XYZ Corp. sending out a notice to all shareholders, informing them of the upcoming election for the small shareholders' director. The notice would detail the process by which small shareholders can nominate candidates and vote for their preferred nominee. Once the votes are tallied, the candidate with the most votes from the small shareholders would be appointed as a director on the board of XYZ Corp., tasked with representing the interests and perspectives of small shareholders within the company's governance structure.