Section 161 of CA 2013 : Section 161: Appointment Of Additional Director, Alternate Director And Nominee Director

Explanation using Example

Imagine a company named "Tech Innovations Ltd." has a Board of Directors consisting of 5 members. One of the directors, Mr. A, is due to go on a sabbatical for six months to another country. The company's Articles of Association allow the Board to appoint alternate directors.

Following Section 161(2) of the Companies Act, 2013, the Board appoints Ms. B as an alternate director to fill in for Mr. A during his absence. Ms. B is not holding any other directorship in Tech Innovations Ltd. and is qualified to be appointed as an independent director. She will serve as an alternate director for the period Mr. A is abroad, not exceeding the duration of Mr. A's original term.

After a couple of months, another director, Mr. C, resigns before his term expires. The Board, under Section 161(4), decides to fill this casual vacancy by appointing Mr. D, who will hold the office only until the next annual general meeting, where shareholders will approve the appointment.