Appointment of Director
Appointment of Directors
The supreme executive authority controlling the management and affairs of an organization vests within the team of directors of the company , collectively mentioned as its Board of Directors. At the core of the company governance practice is that the Board of Directors which oversees how the management serves and protects the longer term interests of all the stakeholders of the corporate.
The institution of board of directors was supported the premise that a gaggle of trustworthy and respectable people should lookout of the interests of the huge number of shareholders who aren’t directly involved within the management of the company . The position of board of directors is that of trust because the board is entrusted with the responsibility to act within the simplest interests of the company .
Categories of Directors
As per Section 149 sub section 3 of Companies Act 2013, Board of Directors of an organization , must have a minimum of 1 resident director i.e. (A one that has lived a minimum of 182 days in India within the previous calendar year)
As per Section 149 (1) (a) second proviso requires certain categories of companies to possess a minimum of 1 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 Rs. 300 cr. or more
• Independent Director
Any Individual are often appointed as Additional Directors by an organization under section 161 of the New Act.
As per Section 161(3). Subject to AOA of company, the Board May appoint an individual as a director nominated by any institution in pursuance of the provisions of any law for the nonce effective or of any agreement or by the Central Government or the govt by virtue of its shareholding during a Government company.( according to term: Subject to AOA of company mean there should be provisions in Articles of Association of Company for appointment of Nominee Director, if there is no provision in Articles of company then alter the availability in AOA)
As per Section 161(2) an organization May appoint, if the articles confer such power on company or a resolution is passed (if an Director is absent from India for a minimum of three months).
Procedure for Appointment of Director as director (MD)
1. Nomination and Remuneration Committee shall recommend the appointment and remuneration payable to MD to Board of Directors, if any
2. Obtain consent in Form DIR-2 from the one that is proposed to be appointed as MD. Obtain a declaration in form DIR-8 from the one that is proposed to be appointed as MD that he’s not disqualified to become a Director
3. Hold committee meeting to
• appoint an individual as a further Director and fix terms and conditions of appointment including remuneration and issue a meeting letter.
• Fix day, date, time for General Meeting
4. just in case of Listed Company, submit a disclosure of appointment to the stock market within 24 hours from the committee meeting and therefore the same are going to be published on the web site of the corporate .
5. File a replica of Board Resolution in Form MGT-14 u/s 117(3)(c) of the businesses act, 2013 within 30 days of passing Resolution. Attachment: Certified true copy of Board resolution
(For All Companies including Private)
6. File Form DIR-12 within 30days of appointment.
Two DIR-12 are going to be filled, First for appointment of a further Director and
second for change in designation from an addition Director to MD
Attachment: DIR-2 Certified true copy of Board resolution
7. File Particular of appointment of MD within 60 days of appointment in Form MR-1.
Attachment: Certified true copy of Board resolution Certified true copy of Members resolution DIR-2
(Not applicable to non-public Company)
8. Make entries in register of Directors and KMP and in form MBP-4
9. Hold a general Meeting and pass Ordinary Resolution/ Special Resolution, because the case could also be .(Not applicable to non-public Company)
10. just in case of Special Resolution (If the person so appointed has attained the age of 70 years), file a replica of Special Resolution along side an explanatory statement in form MGT-14
11. just in case of Listed Company, submit a disclosure of proceeding of the meeting to stock market within 24 hours from the overall meeting and therefore the same are going to be published on the web site of the corporate
12. just in case of Listed Company, submit details regarding voting result within 48 hours from the overall meeting and therefore the same are going to be published on the web site of the corporate
Documentation Needed For Registration
(All the documents should be self-attested)
Procedure for Appointment of Director
Addition of director where Already having DIN And DSC.
Add one Director Already Having DSC. Inclusive of One Din to Board of Director.
Addition of director. Inclusive of One DSC And DIN to Board of Director.
Frequently Asked Questions
Ans. 1. Obtain Consent of Proposed Director:
2. Digital Signature of Proposed Director :
3. Obtain Director number (DIN):
4. Issue of Notice of General Meeting:
5. Hold Extra Ordinary General Meeting of the corporate :
6. Issue Letter of Appointment.
7. File form DIR-12 to ROC.
8. Making Necessary entries in Register of Directors.
Ans. Hold committee meeting for calling AGM. Dispatch Explanatory Statement along side Notice of AGM to the members. Hold General Meeting and pass Ordinary Resolution for the appointment as Director.
Ans: YES .As per provision of Section 117(3)(C) .
Ans: there’s no limit on remuneration for personal Limited Companies. they will pay any amount of remuneration without suits provision of Section 197 and Schedule V.
Ans: Private Ltd. can designate its Director as MD/WTD without approval of shareholder only by passing of Board Resolution.