Distinguish between Appointment of Small Shareholders' Director Vs. Appointment of Independent Director.

Appointment of Small Shareholder Directors' According to Rule 7(1) of the Companies (Appointment and Qualification of Directors) Rules, 2014, a listed company, may upon notice of not less than (a) One thousand small shareholders; or (b) one tenth of the total number of such shareholders, whichever is lower; have a small shareholder's director elected by the small shareholder. A 'Small Shareholders' Director' may be elected voluntarily by any listed company. Thus, a listed company, may, on its own, act to appoint a Small Shareholders' Director. In such a case, no notice from small shareholder(s) is required. Appointment of Independent Director According to Section 149(4) of Companies Act, 2013 every listed public company shall have at least one-third of the total number of directors as independent directors. Further as per Rule 4 of the Companies (Appointment and Qualification of Directors) Rules, 2014, the following class or classes of companies shall have at least two directors as independent directors - the Public Companies having paid up share capital of ten crore rupees or more; or the Public Companies having turnover of one hundred crore rupees or more; or the Public Companies which have, in aggregate, outstanding loans, debentures and deposits, exceeding fifty crore rupees: In case a company covered under this rule is required to appoint a higher number of independent directors due to composition of its audit committee, such higher number of independent directors shall be applicable to it.