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About Add or Remove Directors in the Company


 
 

You may need to add a new director to your Company & there might be the situation where a Director is moving out of the Company. To add a director the person must be eligible as per the Articles of the Company.

The Director of a company is a person elected by the shareholders for managing the affairs of the company as per the Memorandum of Association and Articles of Association of the company. Since a company is an artificial judicial person created by law, it can only act through the agency of natural persons. Thus, only living persons can be Directors of a company and the management of a company is entrusted to the Board of Directors. Appointment of Directors can be required for a company from time to time based on the requirements of the shareholders of the business.

To appoint a director, the person proposing to become a Director must obtain a digital signature certificate (DSC) and director identification number (DIN). DIN can be obtained for any person who is above the age of 18. The nationality or residency status of the DIN applicant does not matters. Hence, Indian Nationals, Non-Resident Indians, and Foreign Nationals can obtain DIN and be appointed as Director of a company in India.

A company can remove a director if he incurs any of the disqualifications specified under the Act, absents himself from board meetings over 12 months, enters into contracts or arrangements against the provisions of section 184, is disqualified by an order of a court or Tribunal, or is convicted by a court of any offence and sentenced to imprisonment for not less than six months.

 

Benefits of Changing Director in the Company


 

Hire new talent on board

With the growth of business, strategies and alliances are developed, that requires inputs of each department are required for effective planning. Also, with an addition of the new product line or department, an expert to lead the team can be hired in a managerial position being director of the company. This benefits the company with specialization and focused efforts.
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Assign operational responsibility without dilution ownership

Directors are responsible for day-to-day operations. With the appointment of an additional director, the shareholders can assign the operational responsibilities to directors keeping strategic control in hand. Here, a director does not require subscribing to share capital, hence, the ownership and voting rights of shareholders does not dilute with a new person on Board.
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Inability to work by existing directors

The existing directors may be unable to serve the company after a certain period due to retirement or other personal reasons. Whether it is a resignation by the director or his death, the company needs to make sure that its work is unaffected. It needs to process for both discontinuations by director and appointment of a new director if any.
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Number of directors fall under statutory limit

The Companies Act has prescribed the minimum number of directors in any company, which is 2 and 3 for Private and Public company respectively. At any time during the company’s existence, the number of directors shall not reduce below from the limit. The company must appoint a new director(s) within 6 months if the number reduces below 2/3.

Documents required for Add or Removal of Director


 
 
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Photograph

Passport size photograph of the director to be appointed
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PAN Card

Self-attested PAN card of the director to be appointed
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Proof of Residence

Aadhar Card/ Voter ID/ Passport/ Driving License director to be appointed
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Digital Signature Certificate

DSC of the continuing director and director to be removed

How to Add or Remove Director with CCA

1. Fill the form given on the right

2. Select your package

3. Fill the company details

4. Pay the amount & done

Once you done, our expert will contact you.

 

 

Frequently Asked Questions

 
1What should I know before changing directors in Private Limited Company?
While carrying change in the board of directors, the company must obtain consent from its Board and members, as required by passing a resolution. Further, the care must be taken that the number of directors does not fall below the statutory limit after removal or resignation.
2 What should I do if number of director(s) in my company is less than 2/3?
If the total number of directors is less than the number prescribed, the company shall appoint a director(s) in the company to fulfill the requirement within 6 months from removal/resignation/death of the concerned director.
3Can I resign myself from the company?
Yes, a director can voluntarily resign. The notice of resignation must be served to company stating reason of resignation. Also, the resigning director needs to file a form for intimation to MCA about his resignation from company.
4What are the pre-requisites to add a director in company?
An individual to be added as a director must be major and qualified under the Companies Act, 2013. For the appointment, the consent of the members is also required.
5Do I need to apply for another DIN, if I have already procured one?
No, you are not required to obtain another DIN. It is permanently allotted and can be used for a person’s subsequent appointment in any company/LLP.
6Whether director needs to subscribe shares for his appointment?
There is no requirement to subscribe the shares by the director. However, if the Articles (AoA) of the company prescribe for any such subscription, it must be fulfilled as a condition for his appointment.
7 Can a Body Corporate be appointed as director in the company?
Only an individual can act as a director in the company. Hence, if any LLP or Company is willing to be added as a director in the company, only its representative may act as the director.
8 Whether NRIs / Foreign Nationals are qualified for appointment of director in Private Company?
Yes, an NRI or Foreign National can be a Director of a Private Limited Company after obtaining Director Identification Number. However, at least one Director on the Board of Directors must be an Indian Resident any time after company incorporation.
9What should I do to remove a Director from a company?
In order to remove a director from a Company, the directors shall conduct a meeting of members for their consent after serving special notice in this regard. The exiting director must be given an opportunity to represent his grounds.
10My director has filed his resignation, what should I do now?
Once the director has filed his resignation with the company and MCA, it is the responsibility of the company to intimate the change to MCA. The requisite e-form is required to be filed within 30 days from the resignation. Further, the vacancy of the director is also required to be filled as per the requirement.
11Do I need to sale/transfer my shares while ending my tenure as director in a company?
No, even after the end of the tenure as director, a person can hold the shares in the company. However, if the shares in the company are subscribed as a condition to appointment as provided by AoA, the shares are also required to be disposed of in the manner provided in AoA.
12 How to transfer the shares while change of director in the company?
The shares of the company shall be transferred by way of executing the Share Transfer deed and by affixing the stamps as per the rates mentioned in the Stamp Act of the concerned State after the change.
 

More Questions?

Contact us for additional assistance

 

More Questions?

Contact us for additional assistance