Add or Remove a Director (Company)

INTRODUCTION

A director is an individual appointed by the stakeholders of the company in order to carry out its day to day operations. The Companies Act, 2013 mandates every company to have a prescribed number of directors based on their status.

PROCESS

1. All alterations to management of a company are governed by the provisions given in the articles of the company. If the articles of the company are silent on this matter, the same need to be amended.
2. Such amendment needs to be made in a General Body Meeting. As per Rule 13 of the Companies (Appointment and Qualification of Directors) Rules, 2014, the Company has to inform its members about the individual who intends to assume office of a director, at least seven days before the general meeting.
3. As per sub section 4 of section 152 of the act, an individual should only be appointed as a director of the company if he has been allotted a Director Identification Number (DIN).
4. It is mandatory for a candidate contesting for the office of a director in a company to submit a declaration that he is qualified to be appointed and execute all responsibilities attached to such appointment. Such declaration has to be made in the format given in form DIR-8.
5. The new director also has to give consent to hold office, which should be given in the physical form DIR-2 (Consent to act as a director of a company) and should be filed along with DIR-12 (Particulars of appointment of directors and the key managerial personnel and the changes among them), along with the necessary fees mentioned in Companies (Registration Offices and Fees) Rules, 2014.
6. Similarly, the removal of directors is also governed by the provisions of the Act. The shareholders of a company are empowered to remove any director from the company before the expiry of tenure of such director. However, there are certain exceptions to the above provision as it exempts certain directors from such removal. Alike appointment of directors, The Companies Act, 2013 and the rules made thereunder prescribe certain mandatory compliances that must be adhered with while removing such director.

ADVANTAGES / FEATURES

1. A new director brings in fresh blood to the organization
2. The addition of new directors also brings in a spirit of competitiveness among others in the organization.

DOCUMENTS REQUIRED

The company needs to file the following documents:

1. DIR-12 (Particulars of appointment of Directors and the key managerial personnel and the changes among them)
2. DIR-2 (Consent to act as A Director of a Company)
3. DIR-3C (Intimation of Director Identification Number by the company to the Registrar DIN services)
4. MR-1 (Return of appointment of Key Managerial Personnel)
5. MBP-1 (Disclosure of Interest by the Directors)
6. GNL-3 (Particulars of person(s) or key managerial personnel charged or specified for the purpose of sub-clause (iii) or (iv) of clause 60 of Section 2)
7. MGT-14 (Filing of Resolutions and agreements to the Registrar under section 117)
8. MR-2 (Form of application to the Central Government for approval of appointment or reappointment and remuneration or increase in remuneration or waiver for excess or over payment to Managing Director or whole Time Director or Manager and commission or remuneration to Directors)

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