An Overview of Change in Directors
A company is an artificial person. A living person has a mind and hands with which he carries out his acts, allowing him to make any decision and have knowledge and intention. On the other hand, a corporate entity as an artificial person lacks all of these characteristics. As an outcome, it must act through a living human. The directors are in charge of the company's operations.
A director is a person who regulates the overall operation of any organisation by utilising various abilities or attributes and plays a significant in the path of success of any organisation. A director is appointed by the company or entity to manage the day-to-day operations of an organisation in accordance with the terms of the Companies Act, 2013. The company's directors are accountable to the company and its shareholders for managing and directing the company's activities in a way that ensures the company's success and profitability while also growing the organization's goodwill. Any change in directors of the company needs to be reported to the concerned ROC at the time of alteration. A corporation can intimate a change in the Board of Directors by filing e-Form DIR-12 with the Registrar of Companies (ROC) within 30 days from the date the resolution for change in director is moved in the company meeting.
Section 2 (13) of the Companies Act of 1956 states that a director is any person exercising the function of Director, by whatever name called. The Articles of Association cover their appointment, duties, retirement rights, and remuneration.
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Section 160 of the Companies Act of 2013: Change in Directors
The process for appointing a member in the company as a director other than a retiring director is outlined in Section 160 and Rule 13 of the Companies (Appointment and Qualification of Directors) Rules, 2014.
Procedure for appointment of new director
Qualifications for the appointment
Section 168 of the Companies Act of 2013: Change in Directors
The Section 168 of the Companies Act of 2013's provides a comprehensive explanation of the resignation of directors, which was missing from the original Act of 1956.
Procedure for the resignation of the director
Section 169 of the Companies Act of 2013: Change in Directors
Section 169 of the Indian Companies Act, 2013, states the overall procedure for the director removal. The section gives share holder a right to remove the director by passing a resolution in a general meeting.
Procedure for the removal of the director
For a smooth and prompt processing of your change of directors, Corpbiz will handle all the necessary forms and paper works for your business. We have years of experience in this subject and can work with you to process minor restructuring for one or two directors to more challenging instances for larger enterprises. We are committed to providing you with the finest service possible and want to make it simple for you to change the organisational structure.
Frequently Asked Questions
A director can be removed without consent. This can only happen when the director does not comply with the laws of the company or works against the benefit of the company. However, such removal has to be done according to a specified procedure
No, removal and resignation are two very different things. Resignation happens when a director voluntarily decides to give up the directorship. Removal occurs when the company forces a director to step down.
No, the outgoing director shall continue to hold his shares even if he discontinues being a company director. However, this may totally depend upon the guidelines laid down in the Articles of Association (AoA) of the company.
Form DIR-12 must be submitted to the Registrar of Companies (RoC). The board resolution has to be attached along with the form. A copy of the resignation letter must also be attached in case of resignation.
DIN is a unique identification number issued to a prospective director by the DIN cell of the Ministry of Corporate Affairs (MCA). An individual should hold a DIN before being appointed as a director in any Company.
Under Section 152 of the Companies Act of 2013, an individual holding a valid DIN and not disqualified from being appointed as Director under Section 164 of the Companies Act of 2013, is eligible to be appointed as director. He shall give his consent to act as a director in writing, along with the disclosure of his interest and a declaration that he is not disqualified or not qualifying from becoming a director under Companies Act of 2013.
As per Section 168(2) of the Companies Act, 2013, a resigning director is only accountable for crimes or offences committed during his tenure.