Director Change
Director resignation involves a formal notice and MCA compliance through the filing of Forms DIR-11 and DIR-12. This legal process, governed by the Companies Act, ensures proper removal of a director’s name from company records.
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Adding a New Director: A Guide to Director Appointment
As a business grows, a private limited company may need to appoint additional directors to manage its expanding operations. The appointment of a new director is a crucial process governed by the Companies Act, 2013, ensuring proper corporate governance and legal compliance.
FileMyFirm offers expert guidance to simplify the director appointment procedure, helping your company expand its board seamlessly and in full compliance with the law.
Understanding the Legal Framework
The appointment of a new director is a formal process that must adhere to specific provisions of the Companies Act, 2013. Key sections include:
- Section 149: Defines the minimum (2) and maximum (15) number of directors for a private limited company.
- Section 152: Outlines the procedure for appointing directors in a general meeting.
Section 161: Governs the appointment of additional, alternate, and nominee directors.
Step-by-Step Procedure for Director Appointment
The process for adding a director to a private limited company is systematic and requires several filings with the Registrar of Companies (RoC).
1. Board Meeting and AOA Review
The first step is to convene a board meeting to approve the appointment of the new director. The Board of Directors must also review the company’s Articles of Association (AOA) to ensure it permits the addition of a director. If not, the AOA must be amended.
2. Obtain DIN and DSC
The individual proposed for the directorship must have a valid Director Identification Number (DIN) and a Digital Signature Certificate (DSC). The prospective director must provide a declaration (in Form DIR-8) stating they are not disqualified under the Companies Act, 2013.
3. Director’s Consent
The proposed director must provide their formal consent to act as a director by signing Form DIR-2. This document is a mandatory part of the filing with the RoC.
4. Shareholder Approval
For the appointment of a director to be finalized, the company must obtain shareholder approval. This is typically done in an Annual General Meeting (AGM) or an Extraordinary General Meeting (EGM).
5. RoC Filings
After the appointment is approved, the company must file two crucial e-forms with the RoC within 30 days:
- Form MGT-14: To register the special resolution (if applicable) for the director’s appointment.
- Form DIR-12: To officially notify the RoC of the director’s appointment and provide their details.
6. Update Statutory Records
The company must update its Register of Directors and other statutory records to reflect the new director’s details.
Key Documents Required
To complete the director appointment procedure, the following documents are typically required:
- PAN Card and Aadhaar Card of the new director.
- Proof of residence (e.g., utility bill).
- Passport-sized photograph.
- Form DIR-2 (Consent to act as Director).
- Form DIR-8 (Declaration of non-disqualification).
Simplify Your Director Appointment with FileMyFirm
To ensure a smooth application, have these documents ready:
- Legal Documents: Trust Deed, Society Reg
The process of adding a director can be complex, involving multiple forms and deadlines. FileMyFirm specializes in the appointment of director process, handling all legal and procedural requirements from start to finish. Our experts assist with all filings and documentation, ensuring your company remains compliant with the Companies Act, 2013.
istration Certificate, or Certificate of Incorporation. - PAN Card: The organization’s PAN card.
- Financial Statements: Audited accounts for the last three years.
- Activity Report: A detailed report on your organization’s charitable activities.
- 12A Certificate: A copy of your valid 12A registration certificate.
Frequestly asked questions ( FAQ )
Director Change encompasses various actions related to the board of a company, governed by the Companies Act, 2013. The main types of changes are:
Appointment of a new Director (including Additional, Alternate, or Nominee Directors).
Resignation of an existing Director.
Removal of a Director (by the Board or Shareholders).
Change in designation (e.g., from Director to Managing Director).
The key e-form used to notify the Registrar of Companies (RoC) about any change in a director’s details—whether it’s an appointment, resignation, or removal—is Form DIR-12.
This form must be filed by the company to officially record the change.
In case of a resignation, the director may also file Form DIR-11 to inform the RoC independently, though the company must still file DIR-12.
The company must file Form DIR-12 with the RoC within 30 days from the date of the resolution (for appointment or removal) or the effective date of the event (for resignation).
Before appointing a new director, the following steps must be completed:
The proposed director must possess a valid Director Identification Number (DIN) and a Digital Signature Certificate (DSC).
The board must hold a meeting to approve the appointment.
The new director must provide their formal Consent to Act as Director in Form DIR-2.
The director must give a declaration of non-disqualification in Form DIR-8.
Failing to file Form DIR-12 within the prescribed 30-day limit results in the company being required to pay additional fees (penalties), which increase with the length of the delay. Failure to file can also lead to the DIN of the newly appointed director not being approved, or penalties being levied on the company and its officers.