CHANGE IN BOARD OF DIRECTOR

CHANGE IN BOARD OF DIRECTOR

HOW TO MAKE CHANGES IN THE BOARD OF DIRECTOR OF A COMPANY?

WHO IS A DIRECTOR

As per Section 2, ( 34) of the companies act 2013 "director" means a director appointed to the Board of a company.

In general words, A director is a person from the Management team who leads or supervises the overall work of the Company.  A company generally comprises a number of directors in the Board of Directors. The director usually reports directly to a vice president or to the CEO directly in order to update the progress of the organization. 

As per section 149 of Companies Act, 2013 Every company shall have a Board of Directors consisting of individuals like directors and shall have—

(a) A minimum number of three directors in the case of a public company, 

(b) Two directors in the case of a private company, 

(c) One director in the case of a One Person Company; and

maximum of fifteen directors(Provided that a company may appoint more than fifteen directors   after passing a special resolution)

Provided further that such class or classes of companies as may be prescribed shall have at least one woman director

WHO CANNOT BE A DIRECTOR OF A COMPANY?

As per section 164 of the Companies Act, 2013 

 (1) A person shall not be eligible for appointment as a director of a company, if —

(a) He is of unsound mind and stands so declared by a competent court;

(b) he is an undischarged insolvent;

(c) He has applied to be adjudicated as an insolvent and his application is pending;

(d)He has been convicted by a court of any offence, whether involving moral turpitude or otherwise, and sentenced in respect thereof to imprisonment for not less than six months and a period of five years has not elapsed from the date of expiry of the sentence:

Provided that if a person has been convicted of any offence and sentenced in respect thereof to imprisonment for a period of seven years or more, he shall not be eligible to be appointed as a director in any company;

(e) An order disqualifying him for appointment as a director has been passed by a court or Tribunal and the order is in force;

(f) He has not paid any calls in respect of any shares of the company held by him, whether alone or jointly with others, and six months have elapsed from the last day fixed for the payment of the call;

(g) He has been convicted of the offence dealing with related party transactions under section 188 at any time during the last preceding five years; or

(h) He has not complied with subsection (3) of section 152.

[(2) No person who is or has been a director of a company which—

(a) Has not filed financial statements or annual returns for any continuous period of three financial years; or

(b) has failed to repay the deposits accepted by it or pay interest thereon or to redeem any debentures on the due date or pay interest due thereon or pay any dividend declared and such failure to pay or redeem continues for one year or more,

WHAT ARE THE DIFFERENT TYPE OF DIRECTOR?

EXECUTIVE DIRECTOR

H/she is the Whole-time working director of the company having higher responsibility towards the organization. 

NON-EXECUTIVE DIRECTORS 

H/she are non-working executives and are not engaged with the ordinary working of the organization. They may participate in the arranging or approach making process. They challenge the official chiefs to think of choices and arrangements that are to the greatest advantage of the organization. 

MANAGING DIRECTOR

They have a significant capacity to decide, oversee and coordinate different individuals from the organization. 

INDEPENDENT DIRECTORS

"independent director" means an independent director referred to in sub-section (6) of section 149; They are the ones who don't have any immediate relationship with the organization. Their experience is their advantage and offers a master guide to the board when required. 

ADDITIONAL DIRECTOR

An Additional Director is a Director who is appointed during the year as per section 161 of the company and holds the position till following Annual General Meeting. 

ALTERNATE DIRECTOR

When a director is absent for more than three months; an alternate director comes onboard on his behalf. He acts as a director for a temporary period. And can only hold office as permissible to the director whose office this director holds.

 HOW TO ADD OR REMOVE DIRECTOR OF A COMPANY?

PROCEDURE FOR THE APPOINTMENT OF THE DIRECTOR

  1. Each proposed director should have DIN no, if he does not have Din then he/she can apply in DIR 3 for the DIN
  2.  Consent letter in DIR -2 should be taken from the proposed Director
  3. After obtaining din a Board resolution is needed to be passed in the Board meeting for the approval of the Appointment of the Director.

We the Legal bank with the help of our expert professionals will provide you drafting of Board resolutions and other required documents as prescribed in Companies Act, 2013.

  1. DIR 12 needs to be file within 30 days of the board meeting to the ROC.

Attachments required in DIR 12

  1. Consent  in Dir-2 along with the KYC of the proposed Director
  2. Certified Copy of Board Resolution

WHAT COMPLIANCES REQUIRED ON THE RESIGNATION OF THE DIRECTOR

 As per Section 168 of the Companies Act, 2013.  A director may resign from his office by giving a notice in writing to the company and the Board shall on receipt of such notice take note of the same and the company shall intimate the Registrar in DIR-12, within 30 days of the approval of the same.

(2) The resignation of a director 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:

Provided that the director who has resigned shall be liable even after his resignation for the offences which occurred during his tenure.

We the Legal bank provide the best solutions related to the ROC Compliances, Tax Compliances and all other applicable compliances of the Company at single platform, you can contact us on 9116098980 or drop an email at caprakash69sharma@gmail.com for the first free consultation. Our experts are available to serve you.

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  Written By

 CS. Neetu Sharma

 Associated Partner with Zumosun Soft Invention/thelegalbank