Under the sector 260 and 284 of the Companies Act, the Article of Association of a company is the place where the Board of Directors has the right to add new directors to the board or remove existing ones.
- The person appointed should be eligible to do so according to the Article of Association and
- Should give written content for being a director.
MINIMUM NUMBER OF DIRECTORS A COMPANY CAN HAVE:
- Public Company: 3
- Private Company: 2
- One Person Company: 1
DIFFERENT CATEGORIES OF DIRECTORS
- Woman Director
- Resident Director
- Additional Director
- Independent Director
- Alternate Director
- Nominee Director
REASONS FOR ADDING AND CHANGING DIRECTORS
Getting New Talent on Board:
To get new talent in the organization for its better flourishment.
The Inefficiency of Existing Director:
The inefficiency of the existing Director can lead to a change of the person in the director’s position.
To Meet Statutory Limit:
In case of death or retirement of the existing director, the position has to be filled within 6 months to meet government regulation.
DOCUMENTS REQUIRED
- Passport
- Proof of Residence
- An Identification Proof
- Passport Size Photo
- A Digital Signature Certificate
- PAN Card
PROCEDURE OF ADDING THE DIRECTOR
- Check the Article of Association (AOA) and see if it supports the addition of a director.
- Digital Signature Certificate (DSC) has to be Applied
- Then fill Application for Director Identification (DIN).
- Fill the basic forms with the Recording form of DIR-2, DIR-12, and DIR-8.
- The person becoming the Director should give his consent through DIR-2.
- Everyone should acknowledge the consent given.
- The New Director has to be acknowledged in the General Meeting by shareholder’s resolution.
- After issuing appointment letter payment negotiations can be done.
- The company can then make necessary entries in the register.
FREQUENTLY ASKED QUESTIONS
Can a Director resign himself from the company?
Yes, the director can voluntarily resign.
Is there an eligibility criterion for appointing the director?
Yes, there is a criterion for becoming a director.
Can a Company add a Foreigner or an NRI as their director?
Yes, they can add a Foreigner or an NRI in their Board of Directors.
Can a Company remove the existing director and appoint a new one?
No, the position of the director has to be filled all the time.
In case of resignation, the temporary director can hold office for how long?
The temporary director can hold office until the coming general meeting. He might get a full term in the meeting.
In how many days the company has to file Form DIR-12 to ROC?
Within 30 days of issuing the appointment, the letter company has to file Form-DIR-12 to ROC.
In how many working days new director has to apply for DIN number if not have?
Within the 3 working days, the new director has to apply for DIN.
Does the director need a new DIN if he already has?
No, no need for a new DIN.
What is the validity of DIN?
DIN number is valid until the service of the director.
How many directors can a private company have?
Minimum 2 directors a private company can have.
