Change in Director in Surat
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Director Change: Procedure, Types, Appointment, and Resignation
A director is essential to a business because they oversee daily operations, make financial choices, and make sure that legal requirements are met. Directors, however, serve on behalf of the firm and its shareholders; they do not own the business.
A Change in Director: What Is It?
The appointment, resignation, removal, or replacement of a director of a firm is referred to as a change in director. Retirement, disqualification, voluntary resignation, or the need for further experience are some of the reasons why this may occur.
Types of Directors in a Company
To complete the KYC process, directors need to provide:
1. Ordinary Director
An ordinary director is a basic board member who attends meetings and participates in decision-making. They are neither whole-time directors nor managing directors.
2. Additional Director
An additional director is appointed by the Board between two annual general meetings (AGMs). They hold office only until the next AGM.
3. Alternate Director
An alternate director acts on behalf of an existing director who is absent from India for at least three months. This is common for NRIs or foreign investors.
4. Professional Director
A professional director is appointed for their expertise in a specific field. They do not hold financial stakes in the company but provide strategic guidance.
5. Nominee Director
A nominee director is appointed by banks, private equity investors, or financial institutions that provide funding to a company.
6. Small Shareholders Director
A listed company must appoint a director representing small shareholders if requested by at least 1,000 shareholders or 10% of total small shareholders (whichever is lower).
7. Woman Director
A company must appoint at least one-woman director if:
-It is a listed company
-It has a paid-up capital of INR 100 crore or more and a turnover of INR 300 crore or more
8. Independent Director
An independent director is a non-executive board member who enhances corporate governance. Their term is up to five years, and certain public companies must have at least two independent directors if they meet any of these criteria:
- Paid-up capital of INR 10 crore or more
- Turnover of INR 100 crore or more
- Total outstanding loans, deposits, or debentures of INR 50 crore or more
Who Can Be a director? (Qualification Criteria)
A person must:
Be of sound mind
Hold the required share qualification (if mentioned in the Articles of Association)
Be an individual (not a corporate entity)
Be solvent (not bankrupt)
Have no criminal convictions
Who Cannot Be a director? (Disqualification Criteria)
A person cannot be a director if they:
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Are mentally unsound (declared by a court)
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Are insolvent or applying for insolvency
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Have been convicted and imprisoned for six months or more
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Have been banned from holding directorship by a tribunal
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Have not paid outstanding company share dues for six months
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Have been convicted of related-party transaction fraud in the past five years
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Have not obtained a Director Identification Number (DIN)
What Happens When You Don't File the Forms on Time?
If you don’t submit the required forms by the deadline, you’ll face penalties:
Late Fee:
You’ll have to pay INR 100 for each day you delay filing.
On the Company:
INR 1,000 per day, subject to a maximum of INR 10 Lakhs.
On Every Officer in Default:
INR 1 Lakh, plus INR 100 per day of delay, subject to a maximum of INR 5 Lakhs.
What is a Director Identification Number (DIN)?
A Director Identification Number (DIN) is an 8-digit unique identification number issued to directors of companies. It is a mandatory requirement under the Companies Act and has lifetime validity.
Documents Required for DIN Application
If the director has already completed DIR-3 KYC, they can simply complete WEB-Based Director’s KYC by:
Address Proof (Driving License, Voter ID, Utility Bills, Passport, Tax Receipts, Bank Statement)
Identity Proof (PAN Card for Indian nationals, Passport for foreign nationals)
Timely filing of DPT-3 ensures compliance, prevents legal risks, and maintains your company’s credibility with financial institutions and stakeholders.