What is Appointment of Additional Director?
Director of a company is a person chosen by the shareholders for managing and looking after the affairs of the company according to the Memorandum of Association and Articles of Association of the company. As a company is an artificial legal person formed by law, it can only act through the group of natural persons. Thus, only living persons can be Directors of a company and the management of a company is delegated to the Board of Directors. Appointment of Directors may be required for a company from time to time as per the requirements of the shareholders of the business.
To appoint a director, the person proposing to become a Director must obtain or have a digital signature certificate (DSC) and director identification number (DIN) which is a mandatory requirement. Any person who is an Indian National or he is a Non-Resident Indian and any Foreign Nationals are allowed to obtain DIN and they can be appointed as Director of a company in India.
Types of Director in a Company to be appointed
- Managing Director.
- Executive Director.
- Ordinary Director.
- Additional Director.
- Alternate Director.
Document necessary and time were taken
Draft of Board Resolution and carry out necessary requirement relating the same and file the board resolution in relevant form with ROC.
What is the procedure for adding a director?
By passing an ordinary resolution at AGM or EGM as the case may be, a new Director can be added to the Board of Director. Ordinary resolutions can be passed by a simple majority. Once a resolution is passed, the Company must file the Resolution along with the necessary documents in the relevant forms and to the Ministry of Corporate Affairs to appoint a Director.
Frequently Asked Questions
Directors are defined as the officers of a company. The directors are termed to be the person who are elected by the shareholders to direct, conduct and manage the affairs of the Company.
A company is an artificial legal person having a separate legal entity with perpetual succession.
DIN is termed as a director’s identification number issued to a prospective director by the DIN cell of Ministry of Corporate Affairs (“MCA”). It is a unique number and is validity is subjective to yearly filing of KYC.
No, it is not considered to be mandatory for any director to hold any digital signature. However, any director who has DIN can have a digital signature.
No, a DIN cannot be renewed. However, its validity is subjective to the yearly filing of KYC.
Any person who is an Indian Citizen or is a Non-Resident Indian and any Foreign Nationals are allowed to obtain DIN. Thus, they can be appointed as Director of a company in India.
In a private limited company, a minimum of two directors are required and can have a maximum of 15 directors. At least one director out of them must be an Indian citizen.
Although the shareholders of the Company appoint the Director of a Company in a general meeting, the Board of the Company, if authorised by the Article of Association of the company can appoint an additional director along with nominee and alternate directors.
A new Director can be added to the Board of Directors by passing of a resolution at an Annual General Meeting or EGM.
Once a resolution is passed by the process of simple majority, a company can file the resolution along with all the necessary documents and the relevant forms to the Ministry of Corporate Affairs.
Yes, directors can be held liable for any such acts or transactions occurred during his tenure which is considered to be illegal in nature.
No, it is not deemed to be necessary for a director to be a shareholder of a company.
Yes, directors are eligible for taking salaries from the Company as per Company rules if he is employed as a full time employee of the Company.
Yes, additional directors are considered eligible for the signing of balance sheet. An additional director enjoys the same rights and powers as of the directors of a company thus are eligible to sign a balance sheet.
Yes, an additional director can be appointed as a managing director of a company only if the shareholders of the company approve such appointment at the general meeting of the company.
As per the Companies Act, 2013, the process of appointment of an additional director at the general meeting is known as the regularization of additional directors.
Yes, directors can be removed from the Company. The shareholders of the Company may remove a director by passing an ordinary resolution in a general meeting.