Structured Biiz

CHANGE IN DIRECTOR

Since the Company is an artificial person, it acts through its Agent i.e., Directors.

As per section 149 of the Companies Act 2013, every Company is required to have a Board of Directors consisting of individuals as Directors.

The maximum number of Directors that can be appointed by Companies is 15, unless the company has taken shareholders’ approval by passing a Special Resolution.

As per section 152 of the Companies Act 2013, where no provision is made in the Articles of Association of the Company for the appointment of First Directors, the subscribers to the memorandum who are individuals shall be deemed to be First Directors of the Company, until the Directors are duly appointed. In case of a One Person Company, an individual member shall be deemed to be its first Directors, until the Directors are duly appointed by the member in accordance with the provisions of this section. 

Every director is required to be appointed by the Company in General Meeting.

Additional Director

An individual can be appointed as an Additional Director at a duly convened Board Meeting. An additional director can hold office up to the date of the next Annual General Meeting or the last date on which Annual General Meeting should have been held, whichever is earlier. 

The Articles of Association of a Company may grant the power to the Board of Directors of the Company to appoint any person as an Additional Director.

Resident Director

Every company is required to have one resident director i.e., a director who stays in India for a total period of not less than 182 days during the financial year.

Executive Director

An Executive Director can be either a Whole Time Director of the Company, or a Managing Director of the Company.

Alternate Director

The Board of Directors of a Company may, if authorised by its Articles or by a resolution passed by the Company in General Meeting, appoint an individual to act as an Alternate Director for a director during his absence for a period of not less than 3 (Three months) from India. An Alternate Director shall vacate the office, if and when the Director in whose place he has been appointed returns to India.

Retirement by rotation

Retirement by Rotation of Directors compulsory in case of Public Limited Company

1/3rd of the total Board of Directors of a public limited company are liable to retire by rotation Every year. They are eligible for reappointment subject to approval of members of the company. Retirement by rotation is not applicable to independent directors. 

1/3rd Independent Directors

Listed Public Companies need to have 1/3rd Independent Directors

Every Listed Public company is required to have one third of the total number of directors as Independent Directors. Following class or classes of Companies are required to have 2 (Two) Independent Directors:

– Public Limited Companies having a paid up capital of Rs. 10 Crore or more; or

– Public Limited Companies having turnover of Rs. 100 Crore or more; or

– Public Limited Companies having (in aggregate) outstanding loans, debentures, deposits exceeding Rs. 50 Crore or more

Women Director

Listed Companies are required to have at least 1 (One) Women Director. Also, following class or classes of Companies are required to have at least 1 (One) Women Director:

–       Public Limited Companies having a paid up capital of Rs. 100 Crore or more; or

–       Public Limited Companies having turnover of Rs. 300 Crore or more

Nominee Director

Subject to the articles of Association of a company, the Board of Directors of a Company may appoint an individual as a Nominee director, in order to represent any institution as per the provisions of any law or in pursuance of execution of any agreement.

Prerequisites for appointment as a Director

DSC & DIN

An individual needs to have a Director Identification Number. For DIN, DSC needs to be obtained first.  

Declaration

A Declaration that he/she is not disqualified to become a Director under the Companies Act, 2013.

Consent

Consent that an individual is willing to be appointed as a Director of the Company. 

Eligibility for appointment as a Director

As per section 164 (1) of the companies act 2013, a person shall not be eligible for appointment as a director of a company, if: 

As per section 164 (2) of the companies act 2013, a person shall not be eligible to be re-appointed as a Director in that Company or appointed as a Director in any other Company for a period of 5 (Five) years in case: 

Resignation of a Director

Removal of a Director

As per Section 168 of the Companies Act, 2013, the Director may resign from his office by giving a notice in writing to the Company. Upon receipt of the notice, the Company shall intimate such resignation to the Registrar of Companies in prescribed manner.

The Resignation shall take effect from the date on which the notice is received by the Company or the date, if any, specified by the Director in the notice, whichever is later.  

Section 169 of the Companies Act, 2013, a Company may, by ordinary resolution, remove a director, not being a director appointed by the Tribunal under section 242, before the expiry of the period of his office after giving him a reasonable opportunity of being heard. 

A special notice shall be required of any resolution, to remove a director under the said section or to appoint a new Director in place of a Director so removed, at the meeting at which he is removed.

Change in Directorship Service

All inclusive