To add a director, the person appointed must be eligible as per the Articles of Association and give his consent in writing
Adding a Director
As per section 260 and section 284 of the Companies Act, 1956, the Articles of Association of a company are the source of authority from where the Board of Directors draws the right to add new directors to the Board or remove existing ones. The Articles of Incorporation must provide for the addition of Directors. The person appointed must be eligible as per the relevant clauses in the Articles of Association and must give his consent to be a director in written form which the company must register with itself.
Procedure for Adding a Director
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The newly-appointed director must apply for a Director Identification Number by filing E-Form DIN-1 with the Ministry of Corporate Affairs, Government of India.
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A resolution needs to be passed by the board, approving the appointment of a director. Once this is done, we will file Form DIR-12 with the Registrar of Companies.
- Add a Director having DSC to the Board of Directors. Fee inclusive of one DIN application. (or)
- Removal of a Director from the Board of Directors of a Company without resigning Directors consent.
Appointment of Director?
Director of a company is a person elected by the shareholders for managing the affairs of the company as per the Memorandum of Association and Articles of Association of the company. Since a company is an artificial judicial person created by law, it can only act through the agency of natural persons. Thus, only living persons can be Directors of a company and the management of a company is entrusted to the Board of Directors. Appointment of Directors can be required for a company from time to time based on the requirements of the shareholders of the business.
To appoint a director, the person proposing to become a Director must obtain a digital signature certificate (DSC) and director identification number (DIN). DIN can be obtained for any person who is above the age of 18. The nationality or residency status of the DIN applicant does not matters. Hence, Indian Nationals, Non-Resident Indians and Foreign Nationals can obtain DIN and be appointed as Director of a company in India.
kanoons is the leading business services platform in India, offering a variety of services like company registration, trademark filing, GST registration, income tax filing and more. kanoons can help you appoint a director in your company. The average time taken to file for appointment of director is about 10 – 15 working days, subject to government processing time and client document submission. Get a free consultation on appointment of director by scheduling an appointment with an kanoons Advisor.
Types of Director in a Company?
Managing Director is a Director, who by virtue of Articles of Association of a company or an agreement with the company or a resolution passed in its general meeting, or by its Board of Directors, is entrusted with substantial powers of managed of affairs of the company.
Executive Director is a Director, who is in full-time employment of the company. Hence, executive directors are deeply involved with the management of the company and managing affairs of the company.
Ordinary Director means a simple Director who attends the Board Meetings of a company and participates in the matters put before the Board of Directors. These Directors are neither whole-time Directors or Managing Directors.
Additional Director is someone appointed by the Board of Directors between two annual general meetings subject to the provisions of the Articles of Association of a company. Additional Directors can hold office only upto the date of next annual general meeting of the Company.
Remove a Director?
A company can only remove a director if he incurs any of the disqualifications specified under the Companies Act, 2013.
The removal of director of a company from its board depends upon the board members present in the company. Once all the relevant details are provided by you our CS/ CA will help you and advise on the best available process.
Resignation of Director
Director of a company is a person elected by the shareholders for managing the affairs of the company as per the Memorandum of Association and Articles of Association of the company. Director in a company may need to resign or the Board of Directors or Shareholders may want to remove a Director for any reasons. In such cases, a Director can resign or be removed by filing the intimation of change of Director with MCA.
The procedure for resignation of director and removal of Director by the Board or Shareholders vary. A Director can resign from a company by giving a notice in writing to the company and the Board is required to file the necessary filings with MCA within 30 days. A Director can also send a copy of the resignation letter to the ROC directly by filing a different set of forms.
kanoons is the market leader in company registration services in India, offering a variety of kanoons is the leading business services platform in India, offering a variety of services like company registration, trademark filing, GST registration, income tax filing and more. kanoons can help you effect resignation of director of a company. The average time taken to file for resignation of director is about 10 – 15 working days, subject to government processing time and client document submission. Get a free consultation on procedure for resignation of director by scheduling an appointment with an kanoons Advisor.
Removing a Director
A company can remove a director if he incurs any of the disqualifications specified under the Act, absents himself from board meetings over 12 months, enters into contracts or arrangements against the provisions of section 184, is disqualified by an order of a court or Tribunal, or is convicted by a court of any offence and sentenced to imprisonment for not less than six months.
Procedure for Removal of Director?
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By ordinary resolution, the director can be removed before the expiry of his period of office, provided he does not hold office for life. Special notice of any resolution to remove a director must be sent by the company to the director concerned. The director (whether or not he is a member of the company) shall be entitled to be heard on the resolution at the meeting.
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The company should wait for an explanation from him. If no reply is received, special notice must be given and, through members’ approval, director can be removed. File the DIR-12 with the Registrar of Companies. Within 10 to 15 days, the director will be removed.
Who is director under company Act 2013?
A director in a company is a person who directs, controls and manages the affairs of the company. The directors in a company are appointed and removed by the board of directors and shareholders of the company.
What is the minimum number of directors to be appointed in a company?
Minimum number of directors present in a company should be:
A public company should have minimum of 3 directors
In case of private company the minimum number of directors should be 2
One director in case of one person company
How long does it take to appoint director in a company?
Appointment of director in a company is made through an online form and hence the process takes only 24 hours to complete.
How can I make an appointment for a director in a company?
The person selected or proposed to be selected as a director of the company must obtain a digital signature certificate (DSC) and director identification number (DIN) before filing an application for director appointment with ROC.
What forms are required for appointing director in a company?
Form DIR-12 is required to be filed with the respective ROC for appointment of the director.
What are the different modes of appointing director in a company?
Different modes of appointing a director in a company are:
Appointment of director by signature to memorandum
Appointment of director by general meeting
What are the documents required for appointment of directors?
For appointment of director in a company the following documents are required:
If the director selected for appointment is new then there is a requirement of filing an application for DIN and DSC.
Appointment letter for the director must be submitted with ROC along with the application form
Copy of the board resolution
Identity proof such as driving licence, voter ID and passport of the director are required.
Is it important to appoint a women director in the company?
Yes, all the listed companies have to appoint atleast one women director in the company board. This means that all the public limited company that have turnover of Rs`300 crore or more in any financial year or with paid-up share capital of Rs 100 crore have to appoint women director.
The newly incorporated companies have to appoint women director within 6 months and existing company within 1 year of the audit report.
When is appointment of director effective?
The appointment of the director can be made effective immediately as the form that is submitted with ROC is an online form and hence is processed the same day it is filed.
Who is the director of company?
Director of the company is an elected member by the shareholders to manage the company affairs laid down in the Memorandum of Association (MOA) and Article of Association (AOA). Board of directors and shareholders can remove the directors appointed for a number of reasons.
What are the types of director in a company?
There is a number of directors listed in the company that have different managerial activities assigned to them.
What are the different Modes of removing a director?
Different modes of removing the director of the company are:
Resignation of director from the board of directors of a company with resigning directors’ consent.
Removal of director from the board of directors of a company without resigning directors’ consent.
Removal of a director from the board of directors of a company without resigning director consent by serving notice.
Who can remove the director in a company?
Power to remove the director from the company is with:
Removal of director by Shareholder
Removal of director by the board
Removal of director by disqualification
What is the directors’ liability after removal from the company?
Directors after removal from the company are not liable for its future liabilities but any acts completed in his tenure will be held against the director of the company.
What is the procedure of removing the director in a company?
The removal of a director from a company is completed after the passing of board resolution which is conducted in the presence of company shareholders. After the passing of the board resolution, the director and the company have to file relevant forms (DIR-11 and DIR-12) with MCA.
Can a director be disqualified?
Yes, a director can be disqualified from the company if the director fails to meet the legal requirements of the rules and regulation listed down in the Companies Act 2013.
Disqualified directors are prohibited from holding the position of director in any other company.
Can I resign if I am the sole director of the company
Yes, you can resign even if you are the sole proprietor in the company. The only requirement is that you will have to appoint someone else as director, to run a company on your behalf.
Alternatively, you can also sell your business and dissolve the company and its assets.
What is the minimum number of directors required for a company?
Minimum director requirement for the companies is as follows:
Every private company has a minimum of 2 directors
Every Public Company has at least 3 directors at any point of the company is active
Impact of removal of director Form Company when they are an active director in another company?
If the director has been removed from the company with his consent then in that scenario the he can remain director in the other companies where he hold similar position but, if he has been disqualified on the grounds that he is either insolvent or of unsound mind, then in that scenario he cannot hold an office similar with similar position in another office.
What are the forms required for removal director?
You are required to submit the following forms with MCA:
Application for disqualification of director DIR-10
Application by Director for Resignation DIR-11
Application by a company declaring its key managerial personnel. DIR-12