XYZ Ltd. is a listed entity having 10 directors. Its paid-up share capital is ₹ 50 Crores divided in equity shares having face value of ₹ 10 each. 70% of the paid-up equity of XYZ Ltd. is held by the promoters of the com

Appointment of Small Shareholder Director According to Section 151 of the Companies Act, 2013 every listed company may have one director elected by "small shareholders". For the purpose of this section, "small shareholder" means a shareholder holding shares of nominal value of not more than twenty thousand rupees or such other sum as may be prescribed. Rule 7 of Companies (Appointment and Qualifications of Directors) Rules, 2014 lays down the terms and conditions for appointment of Small Shareholder's Director. A listed company, may upon notice of not less than 1000 or one-tenth of the total number of small shareholders, whichever is lower, have a Small Shareholders' Director elected by the small shareholders. A listed company may suomoto (on its own accord) opt to have a director representing small shareholders. The Small Shareholder's Director's appointment is optional and made available to listed companies only. In the given case, Ms. R is having 1000 shares of the company having the face value of ₹ 10 which amounts to ₹ 10,000 only. Since the nominal value of holding of Ms. R is less than ₹ 20,000 hence she is eligible to be a small shareholder director subject to compliance with other provisions of the Act relating to appointment of directors. Here the face value of the shares is to be considered and not the market value.