Having problem in appointing a new director or resignation of an existing one??

TYPES OF DIRECTORS IN A COMPANY

Residential Director

Independent Director

Small Shareholders Directors

Women Directors

Additional Director

Alternate Director

Nominee Director

Executive Director

Non-executive Director

Managing Director

CASES OF APPOINTMENT

Following are the different cases of appointment of directors in a company:

The First Director is appointed through Articles of Association of the company. But if the articles of association do not provide any procedure for the appointment of the first director, then in that case the subscribers to the Memorandum of Association who are individuals shall be considered and deemed to be the first directors of the company.

As per section 255 of the companies act 2013, the directors of the company are appointed by the shareholders of the company through a resolution passed at its annual general meeting. However, before such appointment of the director, a communication must be made to the members either through email or through registered post at least seven days before the meeting regarding the candidature of the person proposed to be appointed as a director of the company.

Generally, the members of the company have the power to appoint the directors of the company at the general meeting but in few cases board of directors can also appoint the directors of the company. For example, casual vacancy of the director shall be filled by the BOD of the company. But the appointment shall be subsequently approved by members in the immediate next general meeting.

To avoid oppression or mismanagement of the stakeholders of the company, the central government has the power to appoint director at the anytime but not beyond three years.

INDEPENDENT DIRECTOR

An Independent Director is basically a non-executive director of the company. The primary role of independent director is to help the company to improve the standards of governance and credibility of corporates. He/she should not have any kind of relationship with the company in any capacity that may affect his/her independence.

Following companies are required to compulsorily appoint independent directors in their company:

Every listed public company

Every unlisted public company having

Paid up share capital of Rs 10 crore or more

Turnover of Rs 100 crore or more

Aggregate outstanding loans, deposits and debentures, exceeding 50 crores

Independent director should be appointed by the members of the company in the general meeting by passing resolution.

DOCUMENTS REQUIRED IN APPOINTMENT OF DIRECTORS

Following are the documents which are required in appointment:

The individual who will be appointed as a Director shall have an Active DIN.

In order to appoint a director, a company must file e-form DIR-12 with registrar of companies with other documents within a period of 30 days from the date of the appointment of such director.

Consent of the director has to be obtained by the company in e-form DIR-2.

Director has to submit DIR-8 in relation to intimation about his/her interest in other entities and also to intimate that whether he/she is disqualified to be appointed as a director under section 164 of the companies act,2013.

An explanatory statement has to be annexed to the notice of general meeting in case of appointment of independent director of the company. The explanatory statement shall include a statement that the independent director fulfils all the conditions specified in the companies act 2013.

Board Resolution & General meeting Resolution which is passed by the company for the appointment of the proposed director.

As per section 184(1) of the Companies Act, 2013, MBP-1 has to be filed by the director after his appointment in the company.

RESIGNATION OF DIRECTORS

As Per section 168 of the companies act 2013, following are the procedure which is followed in case of resignation of a director: -

The director may serve the notice of resignation in writing to the company.

Board of directors shall take consideration of the receipt of notice served by the director and accordingly board of director should pass the resolution for accepting the resignation of the director.

Intimation shall be sent by the company to the registrar of office within 30 days of the receipt of the notice in DIR-12.

Report of directors which is placed in the immediately following general meeting shall contain facts of such resignation.

Director shall forward copy of his resignation notice with reasons to registrar within 30 days from date of resignation in form DIR-11 with fees.

As per section 167 of the companies act, if all the directors of a company resign from their offices or vacates then the promoter or, in his absence, the central government shall appoint the required number of directors in the company who shall hold the office till the company appoints the director in general meeting.

EFFECTIVE DATE OF RESIGNATION

The resignation of a director shall have effect from the later of the following dates:

The date on which the company receives the notice

OR

The date specified by the director in the notice