Appointment of Director
To appoint a director, the person must obtain a digital signature certificate (DSC) and director identification number (DIN). DIN can be obtained for any person who is above the age of 18. Hence, Indian Nationals, Non-Resident Indians and Foreign Nationals can obtain DIN and be appointed as Director of a company in India.
Types of Director in Company
A “Managing Director” means a Director who, by virtue of Articles of Association of a Company or an agreement with the company or a resolution passed in its general meeting, or by its Board of Directors, is entrusted with substantial powers of management of affairs of the company.
Whole-time Director or Executive Director
An Executive Director or whole-time Director is someone in full-time employment of the company.
An “Ordinary Director” means a simple Director who attends the Board meetings of a company and participate in the matters put before the Board of Directors. These Directors are neither whole-time Directors or 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 upto 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.
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.
In a One Person Company (OPC), a nominee Director is someone nominated by the sole Director of the One Person Company to take over affairs of the OPC in case of death or incapacitation of sole Director.
Maximum and Minimum Number of Directors in Private Limited Company
A company can have a maximum of fifteen Directors – it can be increased further by passing a special resolution.
Minimum Number of Director in Company are as follows:
- Private Limited Company – Minimum two Directors
- Limited Company – Minimum three Directors
- One Person Company – Minimum one Director
Resignation of Director in Company
Director may resign from a company by giving a notice in writing to the company and the Board is required to intimate the ROC of such notice within 30 day in Form DIR-12. In case the Director chooses, he/she may also send a copy of the resignation letter to the ROC along with the reasons for resignation using form DIR-11.
Process for Removing a Director
A company is empowered to remove its directors before the expiry of their term, the powers of which is vested with the shareholders. Non-compliance with any of the stipulated processes can make the decision void, if appealed in a court.
Issue of Notice
The process of removal must be initiated by way of a notice. This notice must be processed by shareholders holding a minimum voting power of 1%; or who holds shares on which an aggregate sum of not more than Rs 5,00,000 has been paid up on the date of notice. Such a notice, known as special notice must be signed by all the members. The special notice must be delivered to the company at-least 14 days prior to the date of meeting, at which the resolution will be passed. It may be delivered earlier but wouldn’t be valid if issued before three months of the date of meeting.
Notice to Members
A copy of the notice must be sent to the director concerned, who in-turn is entitled to be heard on the resolution at the meeting, whether or not the director is a member of a company. The notice must be served at-least seven days, which is a week prior to the date of meeting. The concerned director can make a representation in writing to the company against the notice of removal. He/she is also entitled to make a plea to the company that the representation must be sent to all the members. Also, the members must be notified of the representation through a notice.
Change of Registered Office to Another State
The company needs to amend the Memorandum of Association to change the registered office from one state to another. A special resolution needs to the be passed by the company for alteration of the MOA. This resolution needs to be filed with the ROC in form MGT-14 within 30 days of the resolution being passed. To change the registered office from one state to another, the company needs to get the approval of the CG in form INC- 23.
The documents mentioned below.
- A copy of the special resolution sanctioning the alteration by the members of the company.
- a copy of the memorandum and articles of association
- A copy of the notice conveying the general meeting along with relevant explanatory statement
- A copy of the minutes of the general meeting wherein the resolution authorising the alteration.
- A list of creditors and debenture holders
- A copy of board resolution or Power of Attorney
- Document relation to payment of application fee
Central government shall dispose of the change of registered office application outside the state within 60 days of the application and before passing it may confirm that the change is with consent of the creditors, debenture holders etc.