As per section 260 and section 284 of the companies ACT, 1956 the Articles of Association of a company are the source of authority from where the Board of Directors draws the right to add new Directors to the board or remove existing ones. Companies Act, 2013 defines the term “director” as someone appointment to the Board of a company. The Board of Director means a group of those individuals elected by the shareholders of a company to manage the affairs of the company. The management of the company is entrusted to a body of person called “Board of Directors”. As per section 149(1): every company shall have a board of directors consisting of individuals as director. They play a very important role in managing the business and other affairs of company. Appointment of Directors is very crucial for the growth and management of company.
Documents Required For Add Directors
The documents required for adding director in a public or a private limited company is as follows-
- Photos of the director
- Residence proof of director – passport/ voter ID/ Aadhar card/ driving license
- Self-attested PAN card copy
- Copy of resolution
- Form DIR-12, form DIR-2, and form DIR-8 to ROC/MCA
- Form MBP-1, MGT-14
- Digital signature certificate (DSC) and Director Identification Number (DIN) of the director.
Number of Directors in Company
Private limited company
Minimum two directors in case of private limited company.
Minimum three directors in case of limited company
One Person Company
Minimum one director in case of one Person Company
Types of director in company
An executive director is someone in full time employment of the company
A “managing Director” means a director who by virtue of “Articles of Association” of a company or an agreement with the company or a resolution passed in its general meeting, or by its board of directors, is entrusted with substantial powers of management of affairs of the company.
Ordinate director are also referred to as simple directors who attend board meeting on a company and participate in the matters put before the board.
An additional director is someone appointed by the directors between two annual general meetings subject to the provision of the articles of association of a company. Additional directors shall hold office only Upto the date of the next annual general meeting of the company. Number of directors and additional directors of a company together shall not exceed the maximum strength fixed for the board of directors by the articles of association.
An alternate director is a person appointed by the board if so authorized by the article or by a resolution passed by the company in the general meeting to act for a director called “The original director” during his absence for a period of note less than three months from the state in which meetings of the Board are ordinarily held. Generally, the alternate directors are appointed for a person who is non-resident Indian or for foreign collaborators of a company.
Any director possessing professional qualifications and do not have any pecuniary interest in the company are called professional directors. In large companies professionals are sometimes appointment to the board to utilize expertise in the management of the company.
Bank and private equity investors who grant debt or equity assistance to a company generally impose a condition as to appointment of their representative on the board of the concerned company. These nominated person are called as nominee director.
Listed companies and limited companies having a paid-up share capital of Rs. 100 crore rupees or turnover of Rs. 300 crores or more are required to appoint at least one woman director. There is no woman director requirement for a private limited company.
Appointment of Directors under Companies ACT-2013
1. Public company or private company subsidiary of a public company
- 2/3 of the total director’s appointment by the shareholders.
- Remaining 1/3 appointment is made as per articles and failing which shareholders shall appoint the remaining.
2. Private company which is not a subsidiary of a public company
- Articles prescribe manner or appointment of any or all the directors.
- In case, articles are silent directors must be appointment by the shareholders.
3. Nominee Director
Nominee director can be appointed by a third party or by the central government in the case of oppression or mismanagement.
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