Director’s Appointment, resignation or change in designation of director
Ask our experts now
Change in Director refers back to the criminal method of appointing, eliminating, or changing company directors as in keeping with the Companies Act, 2013. This vital company compliance involves updating board composition thru resignation, retirement, disqualification, or strategic restructuring. Directors function the business enterprise's governing body, making crucial commercial enterprise decisions and making sure felony compliance. Whether voluntary or mandatory, director adjustments require right documentation, shareholder approvals, and well timed filing of relevant forms with the Registrar of Companies to preserve corporate governance requirements.
A director in a company is appointed to manage the day-to-day business activities and finances and to ensure all statutory filing obligations are met. Directors must act lawfully and honestly and make decisions for the benefit of the company and its members/shareholders. Directors are not the owners of company. They have been appointed to act and take decisions on behalf of company.
An “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 nor Managing Directors.
An 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 shall hold office only up to the date of the next annual general meeting of the Company. Number of Directors and additional Directors of a company together shall not exceed the maximum strength fixed for the Board of Directors by the Articles of Association.
Alternate Director is someone appointed by the Board of Directors in a general meeting to act for a Director called the “original director” during his absence for a period of not less than three months from India. Generally, alternate Directors are appointed for a person who is Non-Resident Indian (NRI) or for foreign collaborators of a company.
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.
Banks and Private Equity investors who grant debt or equity assistance to a company generally impose a condition as to appointment of their representative on the Board of the concerned Company. These nominated persons are called as nominee Director.
A listed company, could upon the notice of minimum 1000 small shareholders or 10% of the total number of the small shareholder, whichever is lower, shall have a director which would be elected by small shareholders.
A company, whether be it a private company or a public company, would be required to appoint minimum one woman director in case it satisfies any of the following criteria:
1) The company is a listed company and its securities are listed on the stock exchange.
2) The paid-up capital of such company is INR 100 crore or more with a turnover of INR 300 crores or more.
Independent directors are non-executive directors of a company and help the company to improve corporate credibility and enhance the governance standards. In other words, an independent director is a non-executive director without a relationship with a company which might influence the independence of his judgment.
The tenure of the Independent directors the hall up to 5 consecutive years; however, they shall be entitled to reappointment by passing a special resolution with the disclosure in the Board’s report. Following companies need to appoint at the least two independent directors:
As regards to the qualification of directors, there is no direct provision in the Companies Act, 2013.But, according to the different provisions relating to the directors; the following qualifications may be mentioned:
Under company law, a director can be disqualified for any of the following reason:
Director Identification Number (DIN) is a unique identification number given to an existing or a potential Change in Director of any company which is incorporated. Director Identification Number (DIN) is a mandatory requirement for all existing and new directors (or proposed directors) of a company. A DIN number is issued under the directions provided by the amendment to the Companies Act. It is an 8-digit Unique Identification Number allotted to all directors. It has lifetime validity.
1.Driving license
2. Voter ID card
3. Utility bills
4. Passport
5. Tax receipts (corporation, property tax, service tax and sales tax, registration and so on)
6. Bank Statement (attested)
1. PAN Card card of the applicant (for Indian nationals)
2. Passport of the applicant, if they are foreign nationals and NRI’s.
A person who wants get appointed as a director in a company has to follow certain compliances requirements under Companies Act 2013
As per sec 168(1) of Companies act 2013, A director may resign from his office by giving a notice in writing to the company and the Board shall on receipt of such notice take note of the same and the company shall intimate the Registrar in such manner, within such time and in such form as may be prescribed and shall also place the fact of such resignation in the report of directors laid in the immediately following general meeting by the company.
The company shall within 30 days from the date of receipt of notice of resignation from a director, intimate the Registrar in Form DIR-12 and post the information on its website if any. In simple words company has to file DIR-12 within 30 days of receipt of notice of resignation by the director.
