Section 160 explained: this guide covers what it means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.
Section 160 lets a person who is not a retiring director stand for election as a director at a general meeting. The person, or a member who wants to propose them, must give written notice at least fourteen days before the meeting and leave a deposit of one lakh rupees.
A person who is not a director retiring by rotation can be appointed at a general meeting only if a written notice of candidature reaches the registered office not less than fourteen days before the meeting, with a deposit of Rs 1,00,000 (or a higher prescribed amount). The deposit is refunded if the person is elected or gets more than twenty-five per cent of the total valid votes cast. The deposit is not needed for an independent director or for a director recommended as the proviso describes.
Who the section is about
The section opens with "a person who is not a retiring director in terms of section 152". An Explanation to section 152 says that, for that section and section 160, "retiring director" means a director retiring by rotation. So section 160 is about outsiders, and about directors who are not retiring by rotation, seeking a seat at a general meeting. A director retiring by rotation who wants to be reappointed does not need to use it. You can see how rotation works in rotation of directors at the AGM.
What sub-section (1) requires
Such a person is eligible for appointment at any general meeting if he, or a member intending to propose him, has done the following, not less than fourteen days before the meeting:
- Left at the registered office of the company a notice in writing under his hand signifying his candidature, or the member's intention to propose him.
- Given the deposit of one lakh rupees or such higher amount as may be prescribed.
| Item | Requirement |
|---|---|
| Notice | In writing, under the candidate's hand (or the member's intention to propose him) |
| Where | Registered office of the company |
| Time | Not less than 14 days before the meeting |
| Deposit | Rs 1 lakh, or higher prescribed amount |
| Refund | If elected, or if more than 25% of total valid votes cast (show of hands or poll) |
If you are helping a candidate get on a board, our appointment of director team can help you check the notice timeline and supporting documents.
When is the deposit refunded
The deposit is refunded to the person or, as the case may be, to the member who proposed him, in two situations:
- the person proposed gets elected as a director; or
- the person proposed gets more than twenty-five per cent of the total valid votes cast, "either on show of hands or on poll on such resolution".
If neither happens, the section does not provide for a refund. The text does not say where unrefunded deposits go, so do not assume a destination the statute does not state.
When no deposit is needed
The proviso says the requirement of deposit "shall not apply" in three cases:
| Case | Text of the proviso |
|---|---|
| Independent director | Appointment of an independent director |
| Committee recommendation | A director recommended by the Nomination and Remuneration Committee, if any, constituted under sub-section (1) of section 178 |
| Board recommendation | A director recommended by the Board, in the case of a company not required to constitute a Nomination and Remuneration Committee |
The 14-day notice requirement remains. The proviso removes only the deposit in those cases. The proviso is printed in square brackets in the consolidated Act, which marks it as an amendment to the original text.
Sub-section (2): telling the members
Sub-section (2) says the company shall inform its members of the candidature of a person under sub-section (1) "in such manner as may be prescribed". The section leaves the method to the rules. In practice the company must act on the notice and make sure the members are told before the vote, so that the meeting is not a surprise. The section does not itself state a penalty for failing to inform members.
How it fits with the rest of the appointment chain
Section 160 is only one gate. Before a person can be appointed the company must also meet the requirements elsewhere in the Act: a director identification number, consent to act, and the absence of disqualification under section 164. The Board's own power to fill a casual position sits in section 161 and works differently: there is no deposit because the appointment is made by the Board, not by the members in general meeting.
Practical examples
Example 1: outsider proposed by a member. A member wants a particular professional on the board of a private company. The member leaves a written notice and a Rs 1 lakh deposit at the registered office 20 days before the general meeting. The professional gets elected, so the deposit is refunded to the member who proposed him.
Example 2: failed candidature. A candidate receives 18% of the valid votes cast on a poll and is not elected. The deposit is not refunded under the section, because neither test in sub-section (1) is met.
Example 3: board-recommended candidate. The Board of a company that is not required to have a Nomination and Remuneration Committee recommends a person. The proviso removes the deposit, although the 14-day notice rule still applies.
Need help with director candidature and appointment?
If you are proposing a director, or standing as a candidate yourself, our team can help you prepare the notice, the consent papers and the resolution for the general meeting. Our appointment of director service covers these steps.
Key takeaways
- Section 160 applies to a person who is not a director retiring by rotation.
- Written notice must be left at the registered office not less than 14 days before the meeting.
- The deposit is Rs 1 lakh or a higher prescribed amount.
- It is refunded on election or on getting more than 25% of total valid votes.
- No deposit for an independent director or a director recommended by the NRC or, where no NRC is required, by the Board.
- The company must inform members of the candidature in the prescribed manner.
Read next
- Section 152: Director Appointment Process and Rotation
- Section 161: Additional, Alternate and Nominee Director
- Section 151 of the Companies Act, 2013: Small shareholders' director
- Rotation of Directors: Which Directors Retire by Rotation at AGM
- Section 187 of the Companies Act, 2013: Investments held in company name
Disclaimer: Based on the Companies Act, 2013 as amended up to 1 April 2021 (official consolidated text), read with later developments noted in the article; proposals in the Corporate Laws (Amendment) Bill, 2026 are pending and not law as on 30 September 2026. Verify current notifications and rules before acting.