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Appointment and Resignation of Directors

For an easy and quick process of appointment and removal of director contact our team of experts at Corpbiz.

  • Expert Consultation
  • Drafting of Resolution
  • Submission of DIR -12 (for resignation and appointment )
  • Class II Digital Signature

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Appointment and Resignation of Directors

Companies Act 2013 clearly states that every company irrespective of its status shall have a board of directors consisting of individual directors. However minimum directors to be appointed varies as per the status of the company such as three directors in public company, two directors in private company, five directors in producer company and only one director in OPC to ensure company performs within the ambit of the law.

Maximum directors in any company shall be 15, which can be increased above the limit provided it is approved by passing a special resolution. Companies Act has also specified the appointment of at least one woman director on board and has mandated at least one director has resided in India for at least 182 days or more.

Maximum directors in any company shall be 15, which can be increased above the limit provided it is approved by passing a special resolution. Companies Act has also specified the appointment of at least one woman director on board and has mandated at least one director has resided in India for at least 182 days or more.

Who is the Director?

The company is an artificial person can only act through its directors who are an officer of the business as the company has no physical existence. Director's appointment is conducted through a group of people whose primary job is to supervise the company's program and project. They are the governing council which is expected to act in good faith and exercise due diligence to achieve the objective of the company.

Appointment & Resignation of Directors in Normal Course

Resignation: Section 168 of Companies Act deal with the resignation of directors The procedure of Resignation of Directors:

  • The resigning director shall serve the notice to the company mentioning the reason for such resignation.
  • Director shall file resignation in form DIR-11 at MCA that shall be digitally signed by his own DSC.
  • The company upon the receipt of such notice shall pass the board resolution for approving the resignation of such director.
  • The company shall file the resignation to ROC in form DIR-12 within 30 days of receipt of such resignation.
  • In case the clause of AOA of the company is silent in such matters, and resignation letter specifically mentions the approval of the board, such resignation is said to be approved.

Duty of Company: Once the notice of resignation is received by a Company, Companies Act prescribes certain duties from the company’s side:

  • Company shall note of such resignation through a board resolution
  • Within 30 days of receipt of resignation, the company shall file DIR-12 to ROC intimating the resignation of director
  • In following subsequent EGM, the company shall place the fact of such resignation in Board Report.

Duty of Resigning Director:  It is the responsibility of directors as well to file his resignation with ROC within 30 days of resigning through Form DIR-11 under his DSC. The resignation is effective from the later of the following:

  • Resignation notice received by the company

OR

  • The date mentioned in the resignation letter

Documents for resignation: Following documents shall be attached with e-form that has to be filed to ROC for the resignation of director:

  • Resignation letter
  • Board Resolution passed by the company

Appointment: Section 152 of Companies Act 2013 governs and regulates the appointment of the director. An individual appointed as a director, along with already appointed directors is responsible for formulating the policies and operating the company. Process of appointment of directors is:

  • The promoter of the company shall consider the person for appointment as a director.
  • Directors need to submit the list of following documents before getting appointed in a company:

    • DIN of director

    • DIR-2 to give his consent to act as a director

    • DIR-8 for intimating any disqualification

    • Interest in other entity as per format MBP-1

    • Id proof and address proof of director

  • Call and held Extra-Ordinary General meetings of members to pass the necessary resolution for the appointment of the director.
  • After the appointment is approved and completed in EGM, Company shall file DIR-12 to ROC within 30 days of such an appointment.
  • Company shall attach the following documents with e-form DIR-12:

    • Appointment Letter

    • Intimation by a company to appointing a director

    • CTC of the resolution passed

    • Notice of EGM

    • DIR-2

    • DIR-8

    • MBP-1

Appointment of Directors when all the Directors Resign at the same time

This is the rarest scenario when all the directors of the company resign at the same time. However, resignation procedure is similar to that of normal course; however, ROC can direct to file a return containing details of directors and such documents as may be directed shall be filed within 30 days of resignation.

When all the directors resign at the same time, new directors are appointed to continue the operational activities of the company to carry forward the legacy of the organization. When all the directors resign, new directors are appointed through promoters or Central Government (if there is no promoter) to hold the chair until new directors are appointed in EGM.

Shareholders of the company come into the picture, and they are authorized to appoint a director when there is no director in the company. Appointing the new director is not possible when all the directors have resigned as e-form DIR-12 for appointment shall be digitally signed by a director of the company. In such a scenario, ROC permits any one of the resigned directors to act as an authorized signatory for filing such form as per the provisions of Companies Act 2013.

The procedure of Appointment of Director in such cases:

  • Directors shall be appointed by following the Standard Operating Procedure for the appointment of a director in such a non-compliant company where all the directors have resigned.
  • Promoter or Central Government shall appoint the temporary director until the director is appointed in duly convened EGM.
  • In the company is Public, notice shall be issued by Company Secretary to call EGM for appointing a new director and if the company is Private Limited, the same shall be issued by the promoter or any member of the company.
  • The appointing director shall give his declaration that he is not disqualified and consent to act as a director. The company shall intimate ROC within 30 days of appointment.

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