Appointment Of Directors

• A director is responsible for directing, managing, overseeing, or controlling the affairs of a company.
• The appointment of a director is regulated by The Company Act, 2013, and directors are responsible for carrying out the company's duties and functions.
• Directors are individuals elected by shareholders in accordance with the company's Memorandum of Association and Articles of Association.
• The Board of Directors refers to a group of individuals elected by shareholders to manage the company's affairs.

• In situations like sudden death, retirement, resignation, or other personal reasons, appointing an additional director becomes necessary to meet the statutory limit of the company.
• Hiring new talent in the company's management is essential for business growth.
• When adding a new product line or department, appointing an expert director is necessary to lead the team.
• If the number of directors specified by law decreases, it becomes mandatory for the company to appoint a new director.
• Appointing a new director can help shareholders delegate operational responsibilities while retaining strategic control.

• The person being appointed as a director must meet the eligibility criteria outlined in the Articles of Association.
• The individual must be at least 18 years old, considered a legal adult.
• The person must meet the qualifications specified in the Companies Act, 2013.
• The existing members of the Board must give their consent for the appointment of the proposed individual as a director.
• It is important to note that there are no specific educational qualifications mentioned in the Companies Act to be eligible for directorship.
• Individuals of Indian nationality, Non-Resident Indians (NRIs), and Foreign Nationals can be appointed as directors in India.

Managing Director:

A Managing Director is a director who, based on the company's Articles of Association, an agreement, a resolution passed in a general meeting, or a decision by the Board of Directors, possesses significant powers to manage the company's affairs.
 

Executive Director:

An Executive Director is a director who is employed by the company on a full-time basis. They are primarily involved in the core management and administration of the company.
 

Additional Director:

In all existing companies, directors are initially registered as Additional Directors. The appointment of an Additional Director is made by the Board of Directors, and they can hold office until the next general meeting.
 

Alternate Director:

An Alternate Director is appointed by the Board of Directors to act on behalf of a Non-Resident Indian or Foreign Collaborator of the company in the original director's absence for a period exceeding three months.

Ordinary Director:

An Ordinary Director is a director who attends Board Meetings and actively participates in the matters presented to the Board of Directors. They are neither full-time directors nor Managing Directors of the company.

• PAN card: Mandatory for an Indian Applicant
• Passport: Mandatory for a foreign Applicant
• Self-attested copy of PAN
• Self-attested copy of identity and address proof such as a passport or Aadhar card or Election card
• Consent to act as director in the format of DIR-2
• Digital Signature of the Appointee director.
• Director Identification Number (DIN) of Appointee director
• Copy of resolution passed by the shareholders
• Notice for shareholders meeting

Procedure for appointment of directors in a company are as follows:

Step 1: If the proposed director does not have a Digital Signature Certificate (DSC), they should obtain one.

Step 2: If the proposed director does not have an active Director Identification Number (DIN), they should apply for it using Form DIR-3.

Step 3: The company should convene a general meeting and pass a resolution to appoint the new director.

Step 4: The proposed director should provide their consent for the appointment by submitting Form DIR-2 to the company. Once the company receives the DIR-2, the person is officially appointed as a director.

Step 5: The company should issue an appointment letter to the newly appointed director.

Step 6: Within 30 days of the appointment, the company must file the necessary forms with the Registrar of Companies (ROC) to inform them about the appointment.