Addition of director
Change of director implies the addition or removal of the director in the company. The board of directors are generally empowered to appoint a director because of casual vacancy caused due to resignation of an existing director. However, such as the appointment of new director by the Board of Directors need to be ratified by the shareholders in a valid Extra-Ordinary General Meeting.
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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 participates in the matters put before the Board of Directors. These Directors are neither whole-time Directors nor 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.
Any Director possessing professional qualifications and do not have any pecuniary 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.
As per Section 149 (1) (a) second proviso requires certain categories of companies to have At Least One 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
Minimum Number of Director In a Company :
- Private Limited Company – Minimum two Directors in case of Private Limited Company
- Limited Company – Minimum three Directors in case of Limited Company.
- One Person Company – Minimum one Director in case of One Person Company.
Documents Required for Director Addition
Latest Passport size Color photograph of all the promoters (Shareholders and Directors)
Any of the following ID: Passport, Voter ID/Driving License of Shareholders and Directors.
Digital Signature Certificate
Digital Signature for New Director
PAN Card of all shareholders and Directors. Foreign nationals must provide a valid passport.
Latest Bank Statement/Telephone Bill/Electricity or Gas Bill/Water Bill of Shareholders and Directors
mandatory for a foreign applicant.
Requirements for Director Addition
To become the Director of a Company, a person must be at least 18 years old and possess Director Identification Number. Foreign Nationals can also become Directors of an Indian Company.
Director Identification Number
Director Identification Number or DIN is a unique number allotted by the Ministry of Corporate Affairs for any person who is a Director of a Company or proposes to be the Director of a Company.
Board of Director
A Private Limited Company must have a minimum of two Directors and up to a maximum of 15 Directors. The Directors do not have to be shareholders. However, they have to be over the age of 18.
Process & Timeline for Director Addition
Frequently Asked Questions
A Director of a Company must be above the age of 18 and must have a Director Identification Number. The person can be an Indian National or a Foreign National.
A Private Limited Company must have a minimum of two Directors at all times. A Limited Company must have a minimum of three Directors at all times.
A Digital Signature, Signed Affidavit from the proposed Director and information about the identity and address of the Director is required.
A digital signature is electronic signature, which is in the form of codes. It is used for signing the electronic forms, filed with ROC for Director Addiont in a Company. Digital Signature cannot be used in physical documents.
A new Director can be added to the Board of Director by passing an ordinary resolution in an Annual General Meeting or an Extraordinary General Meeting. Ordinary resolutions can be passed by a simple majority. Once a resolution is passed, the Company must file the Resolution along with the necessary forms and the Digital Signature of the Managing Director or Secretary of the Company, to the Ministry of Corporate Affairs to appoint a Director.
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