Appointment and Resignation of Directors

Appointment of Director: Section 152, Companies Act, 2013
Directors in a Company are responsible for the management of their companies, and board play an important role in governance, setting strategic direction of the companies. A director is a person who is appointed to perform the duties and functions of a company in accordance with the provisions ofย Theย Company Act, 2013.

REQUIREMENT OF A COMPANY TO HAVE BOARD OF DIRECTORS UNDER DIFFERENT COMPANIES:

Private Limited Company Minimum Two Directors
Public Limited Company Minimum Three Directors
one person Company Minimum One Director
  • As per Section 149(1): Every Company shall have a Board of Directors consisting of Individuals as director.
  • As per Section 152(1): Where no provision is made in the articles of a company for the appointment of the first director, the subscribers to the memorandum who are individuals shall be deemed to be the first directors of the company until the directors are duly appointed and in case of a One Person Company an individual being member shall be deemed to be its first director until the director or directors are duly appointed by the member in accordance with the provisions of this section.
  • In all other cases, the directors can be appointed by the company through a resolution passed in the general meeting. However, before such appointment can be made, the members must be informed by either email or through postal communication at least seven days before the meeting about the candidature of the person as a new director.
  • Save as otherwise expressly provided in this Act, every director shall be appointed by the company in general meeting.
  • Every person proposed to be appointed as a director by the company in general meeting or otherwise, shall furnish his Director Identification Number (DIN) and a declaration that he is not disqualified to become a director under this Act.
  • A company may appoint more than (15) fifteen Directors after passing a special resolution.
  • For Appointment of a director, Company will File e-form DIR-12 with ROC along with below mentioned documents as attachments to the e-form within a period of 30 days from the date of his/her appointment.
  • Documents required as attachments in form:
  • 1. DIR-2(Consent to act as Director of the Company)
  • 2. DIR-8 (Intimation by Director about his interest in other entities and Disqualification under section 164 of the Companies Act, 2013)
  • 3. Letter of Appointment from the company
  • 4. Resolution passed by the Company for his/her appointment(Proposed Director)

Note:ย Failure to notify the Registrar of oneโ€™s appointment as a director is an offence โ€“ if a director fails to notify the Registrar of his appointment within the specified dates as mentioned in the previous paragraph, he is punishable with imprisonment for a period of six months or may have to a pay fine which may extend to fifty thousand rupees and if the non-compliance continues he might have pay an additional fine of rupees five hundred per day of non-compliance.

  • Where Company fails to file DIR-12 within specified time then it will be liable to pay additional fee on following basis:
Period of delay Additionalย Fee
Up to 30 days 2 times of normalย fees
More than 30 days and up to 60 days 4 times of normalย fees
More than 60 days and up to 90 days 6 times of normalย fees
More than 90 days and up to 180 days 10 times of normalย fees

Resignation of director: Section 168 Companies Act, 2013
A director may resign from his office by giving notice in writing to the company.

  • Such 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.
  • The Board shall, on receipt of such notice within 30 days intimate the Registrar in e-Form DIR-12.
  • Duty of Director in resignation:
  • The director shall also forward a copy of resignation along with detailed reasons for the resignation to the Registrar in Form DIR-11 under his/her Digital Signature within 30 days from the date of resignation.
  • As per section 168 (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.
  • Provided that the director who has resigned shall be liable even after his resignation for the offences which occurred during his tenure.

Note: E-forms to be filed in case Resignation of Director are form DIR.11 and DIR.12.

  • Filing of Form DIR.11 is the responsibility of resigning director under his/her digital signature and
  • Whereas Filing of Form DIR.12 is the responsibility of Company.
  • Documents required as attachments:
  • 1. Mention therein the Reason for Resigning(In Form)
  • 2. Enclose the copy of Notice sent to the Company.
  • 3. Enclose Proof Of Dispatch.
  • 4. Resignation letter

Note:ย In case of Resignation or Vacation of all the Directors
As per section 168(3) ofย Companies Act 2013, where all the directors of a company resign from their offices, or vacate their offices under section 167, the promoter or, in his absence, the Central Government shall appoint the required number of directors who shall hold office till the directors are appointed by the company in general meeting.

  • Where Director fails to file DIR-11 within specified time then he will be liable to pay additional fee on following basis:
Periods of Delay Additional Fee
Up to 30 days 2 times of normal fees
More than 30 days and up to 60 days 4 times of normal fees
More than 60 days and up to 90 days 6 times of normal fees
More than 90 days and up to 180 days 10 times of normal fees
More than 180 days 12 times of normal fees
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