{"id":112019,"date":"2023-01-10T09:37:26","date_gmt":"2023-01-10T04:07:26","guid":{"rendered":"https:\/\/legalwindow.in\/?p=112019"},"modified":"2023-01-21T10:38:30","modified_gmt":"2023-01-21T05:08:30","slug":"appointment-and-removal-of-directors","status":"publish","type":"post","link":"https:\/\/www.legalwindow.in\/blog\/appointment-and-removal-of-directors\/","title":{"rendered":"Addition and Removal of Directors under Companies Act, 2013"},"content":{"rendered":"<p><img loading=\"lazy\" decoding=\"async\" class=\"alignnone wp-image-112020 size-full\" title=\"Appointment and Removal of Directors\" src=\"https:\/\/legalwindow.in\/wp-content\/uploads\/Addition-and-Removal-of-Directors-under-Companies-Act-2013-1.png\" alt=\"Appointment and Removal of Directors\" width=\"1200\" height=\"630\" srcset=\"https:\/\/www.legalwindow.in\/blog\/wp-content\/uploads\/Addition-and-Removal-of-Directors-under-Companies-Act-2013-1.png 1200w, https:\/\/www.legalwindow.in\/blog\/wp-content\/uploads\/Addition-and-Removal-of-Directors-under-Companies-Act-2013-1-600x315.png 600w, https:\/\/www.legalwindow.in\/blog\/wp-content\/uploads\/Addition-and-Removal-of-Directors-under-Companies-Act-2013-1-300x158.png 300w, https:\/\/www.legalwindow.in\/blog\/wp-content\/uploads\/Addition-and-Removal-of-Directors-under-Companies-Act-2013-1-1024x538.png 1024w, https:\/\/www.legalwindow.in\/blog\/wp-content\/uploads\/Addition-and-Removal-of-Directors-under-Companies-Act-2013-1-768x403.png 768w\" sizes=\"auto, (max-width: 1200px) 100vw, 1200px\" \/><\/p>\n<p>Directors are the organization\u2019s top decision-makers. In addition to serving as a trustee, agent, employee, and officer of the corporation, a director also performs several other duties. Their job is to oversee and manage the company\u2019s services.<br \/>\nThis article briefly describes the Appointment and Removal of Directors, the Elimination of the Directors, &amp; Removal Process.<\/p>\n<p>The administration of the company is in the hands of the directors. They take decisions on policy matters. They serve in three different ways<\/p>\n<ul>\n<li>As a trustee<\/li>\n<li>As an agent<\/li>\n<li>As a partner<\/li>\n<\/ul>\n<table style=\"width: 100%;\">\n<tbody>\n<tr>\n<td style=\"border: 1px solid #555;\"><strong>Table of Content<\/strong><\/p>\n<ul>\n<li><a href=\"#appointment\">Appointment of a Director<\/a><\/li>\n<li><a href=\"#resignation\">Resignation of a Director<\/a><\/li>\n<li><a href=\"#elimination\">Elimination of the Directors<\/a><\/li>\n<li><a href=\"#alternate\">Alternate Director<\/a><\/li>\n<li><a href=\"#removal\">Removal Process<\/a><\/li>\n<li><a href=\"#conclusion\">Conclusion<\/a><\/li>\n<\/ul>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<h2 id=\"appointment\"><strong>Appointment of a Director <\/strong><\/h2>\n<p>Wherever the Articles of Association permit, the existing Board of Directors can appoint other \u2018Additional directors 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 by shareholders. 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 disclosure of interest in MBP-1. A director should obtain a Director Identification Number (DIN) before appointment.<\/p>\n<p><strong>The process of appointing the director is as follows:<\/strong><\/p>\n<ul>\n<li><strong>Form DIR 2 \u2013 Director\u2019s Consent<br \/>\n<\/strong>The first thing to be done to appoint a director in a firm is to get the proposed director\u2019s permission. The proposed director\u2019s approval to serve as a director in the firm must be submitted in Form DIR 2 along with the other required documents.<\/li>\n<li><strong>Get the Director\u2019s DSC and DIN<br \/>\n<\/strong>The following step is to obtain the proposed director of the company\u2019s Digital Signature Certificate (DSC) and DIN. If they do not already possess a DSC, they are obligated to apply for one from the relevant authorities in India.<br \/>\nWhen it comes to the Director Identification Number (DIN), if the director does not already have one, he must notify the company as soon as possible. The business must next adopt a decision and submit DIR Form 3 to apply for the proposed director\u2019s DIN.<\/li>\n<li><strong>Call the Board and EGM<br \/>\n<\/strong>A general meeting of the firm is where decisions on the appointment of directors are to be taken. Accordingly, the firm will notify all its shareholders that it will be conducting an Extraordinary General Meeting, EGM.<br \/>\nAfter the notice to call for EGM is sent to all shareholders, the next step is to hold the meeting at the specified time and date and pass all the required resolutions for the director\u2019s appointment in the company.<\/li>\n<li><strong>Letter of Appointment<br \/>\n<\/strong>Once the resolution has been approved, a letter of appointment will be sent to the new firm director. The appointment letter will outline the director\u2019s salary and other benefits.<\/li>\n<li><strong>DIR-12 to ROC<br \/>\n<\/strong>Within 30 days after the Director\u2019s appointment, the firm must submit Form DIR 12 and other supporting documentation to the Registrar of Companies, ROC.<\/li>\n<\/ul>\n<h2 id=\"resignation\"><strong>Resignation of a Director <\/strong><\/h2>\n<p>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 30 days. Also, the resigning director may, at his option, submit DIR -11 also.<\/p>\n<h2 id=\"elimination\"><strong>Elimination of the Directors<\/strong><\/h2>\n<p>According to The Companies Act, 2013, a private limited company must have at least two Directors before officially beginning operations.<\/p>\n<p>Except in circumstances of government appointment, shareholders can vote to remove a company director at the General Meeting. When one of the following conditions is met, a director of the firm may be removed:<\/p>\n<ul>\n<li>If a director does any action that could result in disqualification under the Act<\/li>\n<li>If a director has missed more than one year of Board meetings<\/li>\n<li>If a director has announced a voluntary resignation<\/li>\n<li>If a director is indefinitely suspended from participation by the court or the Tribunal<\/li>\n<li>If a director commits violations of Article 184 by signing contracts<\/li>\n<li>If a director is found guilty on charges and given a prison term of at least six months.<\/li>\n<\/ul>\n<h2 id=\"alternate\"><strong>Alternate Director<\/strong><\/h2>\n<p>In case of a foreign director not visiting India for a year, he\/she has to appoint an \u2018Alternate Director\u2019 as a proxy director for receiving notices, attending meetings and voting. Company shall file DIR-12 for appointment and removal of an Alternate Director within 30 days of such an event.<\/p>\n<h2 id=\"removal\"><strong>Removal Process<\/strong><\/h2>\n<p>Two situations in which a director may be removed from their position: if the firm decides to do so or if the director misses three consecutive board meetings. The removal process for both goes as follows :<\/p>\n<p>Section 169 governs removal of a Director.<\/p>\n<ul>\n<li>A company may, by ordinary resolution, remove a director, after giving him a reasonable opportunity of being heard,<\/li>\n<li>Such resolution, to remove a director under this section, or to appoint somebody in place of a director so 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 the Director.<\/li>\n<li>The Board\/ shareholders calling the meeting shall provide the Director, proposed to be removed, an opportunity to be heard on the matter.<\/li>\n<\/ul>\n<p>If the Director skips three consecutive Board meetings<\/p>\n<ul>\n<li>If a director fails to attend three consecutive Board meetings during 12 months, per Section 167 of the Companies Act of 2013, they are deemed to have resigned. This 12-month period begins from the day they missed the first board meeting, even if notified in advance<\/li>\n<li>If a director is absent and the FORM DIR-2 is submitted, it will be treated as though the director has resigned<\/li>\n<li>Once this is done, the director\u2019s name will be erased from the<a href=\"https:\/\/www.mca.gov.in\/content\/mca\/global\/en\/home.html\" target=\"_blank\" rel=\"noopener\"> MCA\u2019<\/a>s online database.<\/li>\n<\/ul>\n<h2><a href=\"https:\/\/legalwindow.in\/appointment-of-director\/\"><img loading=\"lazy\" decoding=\"async\" class=\"alignnone wp-image-110205 size-full\" title=\"Appointment of director\" src=\"https:\/\/legalwindow.in\/wp-content\/uploads\/Appoint-a-Director-in-any-Company-starting-from-3000-1-2.png\" alt=\"Appointment of director\" width=\"1000\" height=\"200\" srcset=\"https:\/\/www.legalwindow.in\/blog\/wp-content\/uploads\/Appoint-a-Director-in-any-Company-starting-from-3000-1-2.png 1000w, https:\/\/www.legalwindow.in\/blog\/wp-content\/uploads\/Appoint-a-Director-in-any-Company-starting-from-3000-1-2-600x120.png 600w, https:\/\/www.legalwindow.in\/blog\/wp-content\/uploads\/Appoint-a-Director-in-any-Company-starting-from-3000-1-2-300x60.png 300w, https:\/\/www.legalwindow.in\/blog\/wp-content\/uploads\/Appoint-a-Director-in-any-Company-starting-from-3000-1-2-768x154.png 768w\" sizes=\"auto, (max-width: 1000px) 100vw, 1000px\" \/><\/a><\/h2>\n<h2 id=\"conclusion\"><strong>Conclusion<\/strong><\/h2>\n<p>A director of a corporation is responsible for many different yet crucial tasks. That is the reason it\u2019s so important to have the correct individual or persons in charge of fulfilling those duties. Appointing and replacing directors is an ongoing process throughout the life of an organization. Without a company structure and shareholders\u2019 agreement, one must follow statutory procedures to appoint or remove a director.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Directors are the organization\u2019s top decision-makers. In addition to serving as a trustee, agent, employee, and officer of the corporation, a director also performs several other duties. Their&hellip;<\/p>\n","protected":false},"author":5,"featured_media":112021,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[26],"tags":[],"class_list":["post-112019","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-compliance"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v28.1 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Appointment and Removal of Directors &#187; Legal Window<\/title>\n<meta name=\"description\" content=\"This article briefly describes the Appointment and Removal of Directors, the Elimination of the Directors, &amp; Removal Process.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.legalwindow.in\/blog\/appointment-and-removal-of-directors\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Appointment and Removal of Directors &#187; 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