Appointment and Resignation of Directors in Bangalore
Any changes to a company's Board
of Directors (BD) shall be made in accordance with the terms of the Companies
Act of 2013, the company's AOA, and any agreed service agreements, if any.
The necessity for a company's
directors to be replaced must be properly justified and authorized by the
company's shareholders.
Adding or replacing a director
requires legal paperwork, a board resolution, and the submission of papers with
the Registrar of Companies.
The company's Annual General
Meeting and Board of Directors shall first authorize the nomination of a new
director, citing and justifying the critical need for appointing a new
director. The prospective director shall be informed as soon as feasible of the
passed resolution in this regard. In Form DIR-2, the new director must once
again offer his or her written approval to serve as a director of the company.
In the event that a director
resigns from the Board of Directors, the resigning director must give notice to
the BD, and the business must have a Board meeting and subsequently a general
meeting to notify about the resignation and accept it with a simple majority
vote. Within 30 days of quitting, the retiring director must additionally send
a copy of the indicated resignation to the concerned ROC in Form DIR-11.
Who is the Director of the Company?
As per the Companies act 2013,
there is no exhaustive definition of the word 'director”. A director is an
important person of the company who is appointed to execute the duties and
functions of the director of a company according to the provisions of the
Companies Act, 2013[1]. Section 2 (34) of the act mentioned that 'director”
means a director placed to work with the Board of Directors.
As per Section 2 (10) of the
Companies Act, 2013 a 'Board of Directors” or 'Board” that associated to a
company means the collective members of the directors of the company. At the
core of the corporate organization, the Board of Directors supervises the management
working and secures the long term interests of all the Company’s stakeholders.
The Eligibility Criteria to be a Director
There are no specified designated
qualifications mentioned or followed to become a director of the company, but
an individual should follow with the following mentors be a director of the
company:
As per the law, a specific
natural person only can become a director of any company.
1. Determination Of Nationality
There is no confinement. However,
a minimum of one Indian director in the company is compulsory.
2. Age Demarcation
There is no specified fixed age
to become a director, but it is necessary that the individual who should be
skilled to enter into any company contract. Furthermore, in a matter of
'managing director,' 'independent' director
or 'full-time' director, of an
authorized company, the person qualifies to be a director if he or she is of 21
years old and has not above 70 years old officially.
3. Limit of Valid Directorship
At a time, any individual can
only be a director of 20 separate companies and out of these 20 companies, ten
can be public limited companies.
4. DIN Needed
To qualify to be the director of
the company, the individual must obtain a Director Identification Number. The
main purpose behind obtaining a DIN is to make ensured that fake directors do
no dupery, and in case the person has any black mark such as criminal activity,
they can be caught using this unique number.
1. PAN Card of the Director to be
designated2. Photograph of the Director to be
designated
3. Proof of Residency such as Aadhar
Card, Voter ID, Passport or Driving License of the director to be appointed4. Digital Signature Certificate or
DSC of the ongoing Director and for the Director to be eliminated or removed
5. Proof of dispatch6. Identity proof such as Passport,
Election card, Driving License or Aadhar card
7. Mobile number and email id of
both personal and official of the Director.8. It is mandatory to apostille all
the needed documents apostilled if the Director is not a citizen of India.
9. Notice of resignation submitted
with the company10. If received acknowledgement of
form.
Appointment Of Directors
As per Section 149(1), every
company shall have a Board of Directors consisting of Individuals as Director.
(It is clear to understand from this line that only an individual can be
director of company. Some persons have doubt that other than individual can be
director or not). According to this section ONLY AN INDIVIDUAL can be director
of company. {The Board shall consist of individuals not of other persons like
firms, LLP, companies, gods or other legal persons.}
Minimum No. of Directors as per
Section 149(1)(a):
1. Three in case of
Public Company.
2. Two in case of
Private Company.
3. One in case of
One Person Company.
Procedure:
First Check whether Articles
(AOA) of the Company contain power/authorization to appoint Director read with
Section 161(1) of the Companies Act, 2013. {If there is no provisions in
Articles of the Company, then Alter the Articles of the company to have
enabling clause for appointment of Director.
Second Check whether such person
have DIN No. or Not. If such person doesn’t have DIN No. then Apply for DIN.
Third following documents are
required from Director to appoint him as Director.
Consent in writing to act as
Director in Form DIR-2 pursuant to Rule-8 of Companies (Appointment &
Qualification of Director) Rules, 2014
Intimation by Director in form
DIR-8 in terms of Companies (Appointment & Qualification of Directors)
Rules, 2014, to the effect that he/ she is not disqualified u/s 164(2) of
Companies Act, 2014.
Advisable to take disclosure of
Interest in Form MBP-1 pursuant to Section 184(1) read with Rule 9(1) of
Companies (Meetings of Board and its Powers) Rules, 2014. {One thing should be
noted MBP-1 should not be dated earlier than date of his/her appointment as
Director}.
However, if there is nothing to
disclose on the part of new Director, even then also require to take form MBP-1
from Director. [NIL disclosure is also a disclosure under section 184(1)].
Fourth after receiving all the
documents from the director:
Call the Board Meeting.
Pass Board Resolution for
appointment of Additional Director and Extra-Ordinary Resolution for
appointment of director other than Additional Director.
Issue Letter of Appointment.
File e-form DIR-12 [Along with
DIR-2 + Letter of Appointment+ DIR-8+ Interest in other entities.]
Make necessary entries in the
Register of Directors along with their Shareholding, if any, maintained u/s 170
of Companies Act, 2013.
Resignation Of Directors
1. The Director intending to
resign shall send notice in writing to the Company. The resignation of a
director shall take effect from:
The date on which the Notice is
received by the company or
The Date, If Any, Specified by
The Director in the notice, whichever is later.
2. The director who has resigned
shall be liable even after his resignation for the offences which occurred
during his tenure.
3. The law has caste duty upon
the Director Resigning, to File Form DIR- 11 (Company shall file form DIR 12)
and
Mention therein the Reason for
Resigning.
Enclose the copy of Notice sent
to the Company.
Enclose Proof Of Dispatch.
File the said form within 30 days
of resignation along with the prescribed filing fees.
There is warning note at the end
of the form which states as follows:
Note: Attention is also drawn to provisions of
Section 448 and 449 which provide for punishment for false statement and
punishment for false evidence respectively. These sections 448 and 449 relate to
punishment for committing fraud or giving false evidence and these are
non-compoundable offences.
Created & Posted by (Aashima)
Accountant at TAXAJ
TAXAJ is a consortium of CA, CS, Advocates & Professionals from specific fields to provide you a One Stop Solution for all your Business, Financial, Taxation & Legal Matters under One Roof. Some of them are: Launch Your Start-Up Company/Business, Trademark & Brand Registration, Digital Marketing, E-Stamp Paper Online, Closure of Business, Legal Services, Payroll Services, etc. For any further queries related to this or anything else visit TAXAJ
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