Appointment of Director

The Company may appoint director for internal management and to make better and sound business decisions for the company.

As per legal requirement, one person company should have a minimum of one director, a private Limited should have a minimum of two directors and the public limited company should have a minimum of three directors which may extend to a maximum of 15 directors. A company may appoint more than 15 directors after passing a special resolution.

As per Section 152 of Companies Act, 2013, Companies can appoint any person as a Director only in General Meeting except appointment of Additional Director which can be done by passing a Board Resolution and the same is required to be informed to the Ministry of Corporate Affairs through filing of e-form DIR-12.

The Company may appoint an additional director only if the articles of association allow the appointment of a new director on the board. The newly appointed Director shall have all the powers and duties similar to those of the other directors on Board.

Appointment of additional Director

Section 161 of Companies Act, 2013 governs the appointment of additional director who shall hold office up to the conclusion of next Annual General Meeting or where the Annual General Meeting could not held then the last date on which AGM was scheduled to be held, whichever is earlier.

In case if the Board of the Company thinks fit to that the Additional Director so appointed should continue as a Director with the Company then he/she can be regularized at the Annual General Meeting of the Company as Director of the Company subject to the approval of the Members of the Company by way passing an. Ordinary Resolution. If the person is rejected by the board, then he or she cannot be appointed again for the position of additional director.

Eligibility Criteria

• Sound mind.
• Not be an undischarged insolvent.
• Not applied to be adjudicated as an insolvent for which application is pending
• Not be convicted by a court of any offence or sentenced in respect thereof to imprisonment for not less than six months and a period of five years has not elapsed from the date of expiry of the sentence
• The court or Tribunal has not passed any order for disqualification against the person being proposed to be appointed as Director
• Not failed to pay any calls in respect of any shares of the company held by him/her, whether alone or jointly with others and six months have elapsed from the last day fixed for the payment of the call.

Documents required for appointment

• Proof of Identity which can be a Driving License or Voter Id or Passport
• Copy of Aadhar Card and PAN Card
• Proof of Permanent Address which can be a Utility Bill (not older than 2 months), Copy of Bank Passbook/Bank Statement.
• Proof of Present Address in case it is different from Permanent Address

Process for Appointment of Additional Director

• Holding of Board Meeting and passing if necessary Board Resolution.
• Providing an appointment letter to the new Director
• Filing of e-form DIR-12 within 30 days of appointment along with the required documents.

Appointment of Director in case of casual vacancy

In order to understand the concept of appointment of Director in Casual Vacancy we first have to understand the meaning of casual vacancy. Casual vacancy means when the office of Director is vacated before expiry of his/her tenure. Following are the reasons behind occurrence of these vacancies:-

• Death;
• Resignation;
• Disqualification;
• Insolvent

Provisions as per Companies Act, 2013

Section 161(4) empowers the Board of Directors of the Company to fill the casual vacancy caused by the death of the Director by appointing a new Director in his/her place by conducting a Board Meeting and passing a Board Resolution in this regard subject to Articles of Association the Company.

The tenure of the new Director so appointed in place of the existing one shall hold the office of Directorship for the remaining entire period for which the existing Director was appointed. Further, the newly appointed Director is not eligible for reappointment as a Director retiring by rotation.

The above mentioned provisions are applicable to the Private Companies who are subsidiaries of any Public Company Also, there is no vacancy caused by a non-rotational director who is appointed otherwise than through general meeting. Section 161 does not apply to him and thus the vacancy cannot be filled by the Board of Directors.

The appointment of new Director so appointed in place of the existing one is shall be subsequently be approved by the Members of the company in immediate next General Meeting.