Director Appointment

Every company is required to have certain numbers of directors in the company to constitute the Board as per the provisions of Companies Act, 2013.

Every company is required to have certain numbers of directors in the company to constitute the Board as per the provisions of Companies Act, 2013. As per the company act 2013 the company requires must have a minimum and maximum number of directors/designated partners, two in the case of private limited, three in the case of public limited company, one in a case of one person company and two in the case of limited liability partnership. A company can have maximum 15 directors. (It can be increased by passing a special resolution).

A 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. Company is an artificial judicial person created by law; it can only act through natural persons. Thus, only natural persons can be the directors in the 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). Indian Nationals, Non-Resident Indians and Foreign Nationals can obtain DIN and be appointed as Director of a company in India.

What is the Procedure for Appointment of Director?

Approval from Board Meeting:
The board should be approved the appointment of new director through passing a board resolution.

Obtain a DIN No:
The appointee director should have a DIN no before appointment in the company. The MCA will issue a DIN to director and its valid for life time and it’s a unique number for every director.

Consent and Declaration:
Proposed directors should be given consent and declaration before to board for his appointment.

Board Meeting:
After received the consent the board will pass a board resolution of his/her appointment.

Filling the Form to ROC:
After the board meeting the DIR-12 file to ROC for final approval from MCA.

Documents Required

  • Application of DIN
  • Aadhar Card
  • PAN card
  • Board Resolution
  • Proposed director Consent
  • Latest address proof (Phone/Utility bill/ Bank Statement)
  • Declaration from director
  • Appointment letter

Appointment of Directors due to the following reasons:

  • Removal of existing Director
  • Death of existing Director
  • New Director appointed by the Board
  • New Director appointed by shareholders
  • Independent director appointment
  • New Director appointed by Government
  • Resignation of director

Types of Director

Resident Director:
As per Section 149 of the company act 2013 the Board of Directors of a company, must have at least one resident director, i.e. a person who has lived not less than 182 days in India in the previous calendar year. The second proviso added to section 149 in the New Act requires all companies to comply with section 149 within a year.

Independent Director:
As per company act 2013 the independent Director is clearly defined as “any director other than a managing director, a whole time director, and a nominee director.” Such a director not having any significant pecuniary relationship with the company is more efficient. Section 149 (4) requires that one third of the directors should be independent directors. Section 149(6) lists in detail the specific qualifications for an independent director-

Woman Director:
In the company act 2013 a new provision is introduced under section 149, which requires certain categories of companies to have at least one woman director on the board. Such companies are any listed company, and any public company having-

  • Paid up capital of Rs. 100 cr. or more, or
  • Turnover of the company is Rs. 300 cr. or more.

Alternate Directors:
As per the Companies Act, 2013, may be appointed by a company if the articles confer such power or a decision is passed by a resolution if an independent Director is absent from India for not less than three months.

Additional Directors:
As per the Companies Act, 2013, additional Directors may be appointed by a company if article confer such power on the Board of Directors of the Company. A provision further added in 2013 with regards to such appointment is that the proposed person should not have failed to get appointed as a Director in a General Meeting.

Nominee Director:
Nominee Director is defined under an explanation to section 149. He is a Director nominated by any financial institution pursuant to any law for the time being in force, or of any agreement or appointed by any Government or any other person to represent its interest.

Professional Director:
Any Director possessing professional qualifications and do not have any pecuniary interest in the company are called Professional Directors. In large companies, Professionals are sometimes appointment to the Board to utilize their expertise in the management of the Company.

Frequently asked questions

What is the DIN No?

DIN number is Director Identification number issue by the Ministry of Corporate Affairs. DIN no is a permanent identification number.

Which documents required for appointment of Director?

Documents from Director:

  • Pan Card, Residence proof, DIN no, declaration, consent letter
  • Documents from Company
  • Board Resolution for Appointment and Director Appointment letter

Minimum and maximum Age to become a director?

18 years and no maximum age to become a director.

Who can become a director in the company?

Any natural person who attained the age 18 years and sound mind, solvent and not convicted by the court can become a director in the company.

Types of director?

Resident Director, Independent Director, Alternate Directors, Additional Directors, Nominee Director, Professional Director, Women Director

What is Minimum and Maximum number of director appoint in the company?

Private limited company minimum 2 and maximum 15 directors