Change in Directors

Change in Directors with Bizhub

The company’s brain is said to be the directors. They are the people in charge of managing and administering the company’s operations.

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    The company’s brain is said to be the directors. They are the people in charge of managing and administering the company’s operations. The rotation of directors occurs in one of two ways: new directors are appointed or existing directors resign. The goal of a change of directors is to ensure the best possible combination of experts on the board for the company’s best interests.

    The members of the Board of Directors have the authority to approve the resignation of a director, whereas the appointment of a director requires shareholder consent. Whether it’s an appointment, a dismissal, or a resignation, the change doesn’t take effect until the Ministry of Corporate Affairs is notified.

    Addition of director

    A company’s director is a person chosen by the shareholders to manage the company’s affairs in accordance with the MOA and AOA. The company can only act through the agency of a natural person because it is an artificial person. As a result, a director must be a living person, and the company’s management is entrusted to its Board of Directors. The appointment of Directors may be necessary from time to time, depending on the needs of the company’s shareholders.

    How to add a Director to a Company?

    The Directors of a Private Limited Company play a critical role in the company’s operation. The Directors are in charge of the day-to-day operations and decisions. The directors are the key people in whom the company’s shareholders put their trust when it comes to investing their money. In this article, we’ll look at how a company in India can legally change its board of directors and add new directors.

    • The first step is to obtain the consent of the proposed directors: The consent of the proposed directors is required by Form DIR-2, which is a very important document that the company must obtain before proposing him to the Company’s Director.
    • Proposed Directors’ Digital Signature Certificates: If the proposed directors of the company do not have digital signatures, they must obtain one. Now is the time to apply for DSC.
    • Obtain the Proposed Director’s Director Identification Number (DIN): If the proposed director does not have a DIN, the company should apply for one. This resolution must be submitted with the DIR3 form. This DIN, which is only assigned once, can be used indefinitely. A DIN number can be obtained by anyone over the age of 18. Furthermore, the proposer’s nationality is irrelevant. As a result, Indian nationals, non-resident Indians, and foreign nationals can all obtain a DIN and be appointed as directors of a private limited company in India.

    According to the job requirements, the company should obtain all KYC documents as well as the necessary educational qualifications documents. In India, there is no minimum educational requirement for holding the position of Director in a company.

    In a Private Limited Company, who is a director?

    According to the Companies Act of 2013, a director is someone who is appointed to a company’s board of directors. The Board of Directors is a group of individuals who are elected by the company’s shareholders to manage the company’s affairs. A company can only act through the agency of natural persons because it is an artificial legal person created by law. The Directors can only act through Human beings, and it is through the Directors that the company primarily operates. The Board of Directors is the group of people who are in charge of a company’s management.

    A director is someone who administers, controls, or directs something, according to the other definitions. Someone who supervises, controls, or manages is known as a director. He is a person who is appointed or elected by the shareholders of a company to direct the company’s policies; he is a person who is authorized to manage and direct the Company’s affairs under the law.

    Why changing directors is required?

    Bring on new talent

    As a business grows, it develops strategies and alliances, which necessitate input from all departments for effective planning. In addition, with the addition of a new product line or department, a team leader can be hired in a managerial position as the company’s director. Specialization and concentrated efforts benefit the company.

    Assign operational responsibility without diluting ownership

    The day-to-day operations are the responsibility of the directors. The shareholders can delegate operational responsibilities to directors while maintaining strategic control by appointing an additional director. Because a director is not required to subscribe to share capital, the ownership and voting rights of shareholders are not diluted by the addition of a new member to the Boar.

    Existing directors' inability to work

    Existing directors may be unable to continue to serve the company after a certain period of time due to retirement or other personal reasons. Whether the director resigns or dies, the company must ensure that its operations are not disrupted. It must handle both director terminations and, if necessary, the appointment of a new director.

    The number of directors in a company must meet statutory requirements

    The Companies Act specifies the minimum number of directors in a company, which is two for a private company and three for a public company. The number of directors shall not be reduced below the limit at any time during the company’s existence. If the number of directors falls below 2/3, the company must appoint a new director(s) within 6 months.

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    Necessary Documentation

    The documents required in order to affect the addition of a director to your Companies are-

    From Director From Company
    PAN Card CTC of Board Meeting Resolution

    Appointing New Director

    Residence Proof
    DSC Letter of Appointment
    DIN Declaration Duly filled form DIR 12
    Consent Letter for Appointment as DIR-2

    Details to be provided for obtaining Udyam Registration

    1. Managing Director: A Managing Director is a director by virtue of the company’s Articles of Association, an agreement with the company, or a general meeting or Board of Directors resolution. The board of directors is entrusted with significant management powers over the company’s affairs.

    2. Whole-time Director or Executive Director: An executive director or whole director is someone who works for the company full-time.

    3. Ordinary Director: An ordinary director is a simple director who attends a company’s Board meetings and participates in decisions made by the Board of Directors. These individuals are not full-time or managing directors.

    4. Additional Director: An additional director is a person appointed by the Board of Directors between the two annual general meetings, subject to the provisions of the company’s articles of incorporation. The additional directors should only be in office until the Company’s next annual general meeting. However, the total number of directors and additional directors in a company must not exceed the maximum strength set by the Articles of Association for the Board of Directors. The Board of Directors may appoint a director to act in place of the original director for a period of not less than three months during his absence. In most cases, alternate directors are appointed to replace a non-resident Indian or a company’s foreign collaborators.

    5. Professional Director: A professional Director is a director who has received professional training and has no financial stake in the company. These professional Directors are occasionally appointed to the board of directors in order to put their experience to work in the company’s management.

    6. Nominee Director: Generally, banks and private equity investors who provide equity assistance to a company impose a condition that their representative is appointed to the Board of Directors of the company in question. The Nominee Director is the title given to these individuals who have been nominated.

    In the case of a One-Person Company, a nominee director is an individual who is nominated by the company’s sole director to take over the company’s affairs in the event of the sole director’s death or incapacitation.

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    Liability of Director after the resignation

    Once a Director resigns and the Board accepts his resignation, the Director is no longer liable for any liabilities incurred by the company after the date of the resignation acceptance.

    A director, on the other hand, is still liable for any offenses committed while serving as a director of the Company.

    Removing a director: A Step-by-Step Guide

    The shareholders have the power to remove a company’s directors before the expiration of their term. The process of removing a company’s directors will be discussed here. If the decision is challenged in court, non-compliance with any of these processes can render the decision null and void.

    Basic Prerequisite

    This process of removing the Director cannot begin without giving the Director who is to be removed an opportunity to be heard. This is one of the most basic requirements of the laws, which gives the defendant or defaulter a chance to be heard.

    Issuing a Notice

    A notice must be issued to begin the process of removing Directors. This notice should be processed by shareholders with a minimum voting power of 1% or by someone who owns shares with a total value of not more than Rs. 5,00,000 on the date of the notice. This is a special notice that all members are required to sign. This special note must be delivered to the Company at least 14 days prior to the meeting at which the resolution will be adopted. If the notice isn’t sent out three months before the meeting, it won’t be valid.

    Notice to Members

    Whether or not the director is a member of the Company, a copy of the Notice must be sent to each director who will be heard on the resolution at the meeting. The notice should be served at least seven days, or one week, before the meeting. If the shareholders are unable to deliver the notice, it can be published in one English newspaper and one vernacular newspaper. The notice must be posted on the company’s website at least seven days before the meeting date.

    Written representation

    The concerned director may file a written representation in opposition to the removal notice. The director has the option of requesting that the company send the representation to all members. A notice should also be sent to the members informing them of the representation. If the company is unable to reach all of its members, the director may request that this representation be read aloud.

    Application to the Tribunal

    If the organization or any aggrieved person decides not to send the representation to the members or read it out in the meeting, an application to the tribunal can be filed to request that the process be nullified. If the tribunal finds that the Director is abusing this right for defamatory purposes, the process can be terminated. This director is also given the authority to issue an order requiring the director to pay the company’s application costs.

    Resignation of a Director in a Company

    For a variety of reasons, a company’s Director may wish to resign or the Board of Directors may wish to remove the Director. A company’s Director can also resign from the Board of Directors by filing a resignation letter with the company and notifying the ROC. We’ll look at the steps a director must take to resign from his or her position as a director in this article.

    Director’s notice of resignation to the company

    A director may resign from a company after giving written notice to the company. The Board must notify the ROC of this notice in the form of DIR-12 within 30 days. If the Director so desires, he may also use Form DIR-11 to send a copy of the resignation letter to the ROC, along with the reasons for the resignation. The following is the format for a director’s resignation letter:

    Obligation on the part of the Director who is resigning from the post

    1. A director can resign from his position by giving written notice to the company’s Board of Directors. A valid mode of communication with the company is via email or letter.
    2. Within 30 days of the date of resignation, a copy of the resignation, along with the detailed reason for the resignation, can be sent to the Registrar of Companies in Form DIR11, along with the prescribed fees in the Companies Rules,2014.

    *Effective date of resignation: It will take effect on the date the company receives the notice of resignation or the date specified by the director. The effective date of resignation is the same as the date of cessation listed on form DIR12.

    With DIR-11 the Director is also required to attach the following documents:

    • The Company receives notice of your resignation (resignation letter can also be attached)
    • A copy of the letter’s proof of delivery.
    • If the Director has selected Yes in Form DIR11 for any acknowledgment received from the Company that is mandatory.
    • Optional attachments can be used to provide additional information.

    Obligations for the Company

    1. The Board of Directors shall consider the notice of resignation received and, as a result, the Board of Directors shall pass a resolution accepting the resignation, as well as draught the minutes of the meeting of the Board of Directors.
    2. The Registrar should be notified in Form DIR12 (as per Rule 15 of the Companies Act, 2014), and the Board of Directors should be notified within 30 days of the resignation being received.
    3. The resignation should be mentioned by the board of directors in the annual general meeting’s Director’s report, as well as on the Company’s website.

    The company is required to attach these documents while filing DIR1:

    • The notice of resignation (Mandatory)
    • Evidence of cessation (The board resolution or the acceptance letter can be attached)


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      Change in Directors Packages

      Premium Package

      a) Document Preparation ) Filing of Form 12/ Form 11 for Addition/Removal of Director

      Forrtuna Bizhub Price: 1999
      (Including Government Fee)
      Gst: 360
      Total Price: 2359
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      Change in Directors Packages

      Premium Package

      a) Director Identification Number (DIN) of Director
      b) Digital Signature Certificate (DSC) of Director
      c) Filing of Form 12 for appointment of One Director

      Forrtuna Bizhub Price: 4499
      (Including Government Fee)
      Gst: 810
      Total Price: 5309
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