Appointment and Removal of Directors- Brief overview

1. BRIEF OVERVIEW OF CHANGE IN DIRECTORS IN A COMPANY–APPOINTMENT AND REMOVAL OFDIRECTORS https://taxguru.in/company-law/appointment-removal-directors-brief-overview.html Brief overview of Change in Directors in a Company – Appointment and Removal ofDirectors Directors are a very important pivot, perhaps the most important pivot of a Company. Shareholders appoint them to manage the affairs of the Company. They have specific functions, duties and powers. Chapter XI of the Companies Act,2013 contains the provisions for change in Directors i.e. their appointment, resignation andremoval. PageContents 1. Appointment of a Director 2. Resignation of a Director 3. Re- designation ofdirector 4. AlternateDirector 5. Removal ofDirector Appointment of aDirector Wherever the Articles of Association permit, the existing Board of Directors can appoint other ‘Additional directors‘ who can hold office till their confirmation at the next meeting of shareholders. However, in all other cases, shareholders have the sole authority to appoint Directors in general meeting. Further, there are some categories of directors like nominee directors/ regulatory directors who are not appointed byshareholders. The director, proposed to be appointed, should declare that he or she is free of all disqualifications which are mentioned under Section 164. Further, he should give his consent in forms DIR -2 and DIR -8 and disclosureof interest inMBP-1. Before appointment, a director should obtain a Director Identification Number(DIN). Company shall file Form DIR -12 with the Registrar of Companies within 30 days of the director’s appointment. Form DIR-12 is the general form to be filed for all change indirectors. Resignation of aDirector Section 169 of the Act governs a situation of resignation of a Director. On receipt of the notice/letter of resignation, Company has to file DIR-12 within 30days.

2. Also, the resigning director may, at his option, submit DIR -11also. • Re- designation ofdirector • Re-designation of a Director can happenwhen: • When a Director is re-designated from an executive/whole time to non- executive director or vice -versa OR • shareholders confirm the additional director’s appointment in a generalmeeting. • Re-designation is not actually a change in Director but its more a change in post. But even In such cases, Company has to file DIR -12 within 30 days of suchre-designation. • AlternateDirector • In case of a foreign director not visiting India for a year, he/she has to appoint an ‘Alternate Director’ as a proxy director for receiving notices, attending meetings andvoting. • Company shall file DIR-12 for appointment and removal of an Alternate Director within 30 days of such an event. • Removal ofDirector • Section 169 governs removal of aDirector. • A company may, by ordinary resolution, remove a director, after giving him a reasonable opportunity of beingheard, • Suchresolution,toremoveadirectorunderthissection,ortoappointsomebodyinplaceofadirectorso • removed, at the meeting at which he is removed shall have an attachment as a Special Notice which shall lay down the reasons for removal and any written representations made by theDirector. • TheBoard/shareholderscallingthemeetingshallprovidetheDirector,proposedtoberemoved,an • opportunity to be heard on thematter. • In case of any queries, do drop an email toinfo@entrecap.in