Add or Remove Director
Add/ Remove Director
A person can hold directorship in maximum 20 companies. While the number of directorships in public companies shall be limited to 10. A director may be executive or non-executive in nature. Directors who are in employment with the company are called executive directors while the ones not in employment with the company are called non-executive directors.
The members of a company may restrict the above-mentioned limit by passing a special resolution.
Disqualifications from being a director
- A person who is declared to be of unsound mind by a Court of competent jurisdiction
- A person who is an undischarged insolvent
- A person who has applied to be adjudicated as an insolvent and his application is pending
- A person who has not been allotted a DIN
- A person who holds office as a director in 20 companies or more (10 companies or more, if all are public companies)
- A person who has been convicted of an offence dealing with related party transactions at any time during the preceding 5 years
- A person against whom an order disqualifying him for appointment as a director has been passed by a Court or Tribunal and the order is in force
- A person who has not paid any call on shares of the company held by him and 6 months have elapsed from the last day fixed for the payment of the call
- A person who has been convicted by a Court of any offence and sentenced to imprisonment for 6 months or more, and 5 years have not elapsed from the date of expiry of the sentence
- A person is a director in a company and the company has:
1. Not filed financial statements or annual returns for any continuous period of 3 financial years.
2. Failed to repay deposits, redeem debentures, pay interest or dividend (declared), and such failure continues for 1 year or more.
Types of Directors
In general, following types of directors are appointed in a company: -
- Executive Director
- Non-executive Director
- Managing Director
- Independent Director
- Small Shareholders Director
- Additional Director
- Alternate Director
- Nominee Director
Appointment of a director
To be eligible for appointment as a director, a person must have the unique 8-digit identification number Director Identification Number (DIN). In order to be eligible for appointment, a director has to qualify the necessary criteria as provided in the Companies Act 2013.
Resignation of Director
A director may resign from his office by giving a notice in writing to the company. The director is required to file such resignation with the ROC in Form DIR 11 within 30 days from the date of resignation. The resignation shall take effect from the date on which notice is received by the company or the date specified in the notice, whichever is later.
- Drafting of Board Resolution
- Filing of Form DIR-12
For Appointment of Director
- Drafting of appointment letter, disclosure of interest
- DSC of one director
- Filing Form DIR-3 for new director
For Resignation of Director
- Filing of Form DIR-11
- ROC Filing Fees
- Appointment Letter
- Photograph of director
- Identity proof of the director
- Address proof of the director
- Declarations giving consent to act as director
- Notice of Resignation
- Proof of dispatch of Notice
- Proof of Acceptance of resignation
Director Identification Number (DIN) is an 8-digit unique code allotted to a person willing to act as a director. Every applicant, who intends to be appointed as director of any company shall make an application electronically in Form DIR-3 for allotment of a Director Identification Number (DIN).
The applicant shall attach the following documents along with Form DIR-3:
- Proof of identity
- Proof of residence
- Specimen signature duly verified
- Digital signature
A person can hold directorship in not more than 20 companies, provided that the maximum number of public companies in which a person can be appointed as a director shall not exceed ten. For reckoning the limit of public companies in which a person can be appointed as director, directorship in private companies that are either holding or subsidiary company of a public company shall be included.
The following class of companies shall appoint at least one woman director:
- Every listed company;
- Every other public company having -
1. Paid–up share capital of Rs 100 crores or more
2. Turnover of Rs 300 crores or more.
Any intermittent vacancy of a woman director shall be filled-up by the Board at the earliest but not later than immediate next Board meeting or three months from the date of such vacancy, whichever is later.
Every company shall have at least one director who stays in India for a total period of not less than 182 days during the financial year.
The maximum number of directors is 15. However, a company may appoint more than 15 directors by passing a Special Resolution. The minimum number of directors are as follows: -
- Public Company - 3
- Private Company - 2
- OPC - 1
Every listed public company shall have at least one-third of the total number of directors as independent directors. The Central Government may prescribe the minimum number of independent directors in case of any class or classes of public companies.
The time limit for filing Form DIR-12 is 30 days from the date of appointment/ resignation of director. Failure to file the form within due date will attract late fee.
No. The provisions of The Companies Act 2013 does not given any power to the board of directors to reject the resignation notice given by a director. The law clearly states that resignation shall be taken into effect from the date on which the company receives the notice of resignation, or such later date as may be mentioned in the notice.
In case of appointment, the director is not required to file any form with the ROC. He is required to provide his declaration of consent in Form DIR-2 and declaration of qualification in Form DIR-8 to the company.
In case of resignation, the director is required to file Form DIR-11 with the ROC, within 30 days from the date of resignation.
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