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Change in Directors

Change in Directors of a company is a legal process processed under jurisdiction laws, specific rules, and considerations associated with event-based compliance. Darshan Corporate Pvt Ltd will efficiently proceed with the “change in directors” process with no hassle. Our dedicated team will understand the nature of the changed nominated directors, and prepare requisite documents that should be filed with the MCA to change the board of directors officially.

Who are the board of directors?

The board of directors is a group of directors that usually consists of 15 members maximum. These directors are usually appointed by the shareholders and owners of the company to oversee its management and make crucial decisions on behalf of the organization. A change in directors of a company can be due to various reasons like resignations, retirements, appointments, elections, and removal. A board meeting is called to approve the “change in directors” decision. The board will pass the resolution to confirm the appointment or election of new directors. A director is appointed by the company to manage the day-to-day operations of an organization according to the Companies Act, 2013. Any change including the addition or removal of the director of the company needs to be reported to the concerned ROC at the time of alteration. By filing e-Form DIR-12 with the Register of Companies (RoC), a company can make a change in the “Board of Directors” within 30 days from the date of resolution bring out. The Article of Association (AoA) covers the director’s duties, rights, remuneration, appointment, etc.

The process of appointing a new director is outlined in Section 160 of the Companies Rules, 2013.

Procedure for appointing a new director:

  • Apply for DIN by filing form DIR-3, Section 66A, and Section 266B of the Companies Act, 2013.
  • Holding board meetings and passing the necessary resolutions.
  • Hold a general meeting; all interested parties must be notified at least 21 days before the meeting date. A resolution is adopted at such a general meeting to note the appointment of a director.
  • Send the director a letter of appointment.
  • After being appointed, submit E-form DIR-12 within 30 days.
  • A copy of the CTC, consent, and director's letter of appointment must be attached to the DIR-12.
  • Submit E-Form MGT-14 (to disclose a director's stake in MBP-1).

Qualifications for the appointment

  • A director should be a person with a sound mind
  • Only an individual or person can be appointed as the director of the company according to Section 149.
  • The director must be a solvent person
  • He must not been found guilty by the court.

Section 168 of the Companies Act, 2013

The process for the resignation of the director:

  • The director is obligated to give notice of his decision to resign from the company and to include a letter outlining his reasons for doing so.
  • The resignation will only be effective as of the day the company receives the notification.
  • The departing director must submit a DIR-11 to ROC notifying the organization of his departure.
  • When the resignation notice is received by the company, it must immediately be put into effect and approved by a relevant decision.
  • Within 30 days of the resignation's effective date, the employer must submit DIR-12.

The Companies Act of 2013's Section 169 - Change in Directors

The general process for the dismissal of the director is outlined in Section 169 of the Indian Companies Act, 2013. According to the clause, shareholders have the power to vote in a general meeting to remove the director.

The steps to remove the director are as follows:

  • In a general meeting, shareholders can vote to dismiss the directors by voting an ordinary resolution.
  • The shareholders must give specific notice of their decision to remove a director.
  • Following receipt of the notice, the corporation is required to distribute the notice to every member at least 7 days before the meeting date.
  • The concerned director will be informed by the corporation of his dismissal. It is necessary to allow the director a chance to be heard.
  • Every resolution must be submitted to ROC in form MGT-14 within 30 days of the special resolution being passed.

You need to know before begin everything.

Yes, this only happens when the director does not comply with the laws of the company. This removal is done according to a specific procedure.

No, removal and resignation are two different things, Removal states that the director is forced to quit and resignation of the director means when the director willingly decides to give up directorship of the company.

A person holding a valid DIN and disqualified from being appointed as director according to Section 164 of the Companies Act, 2013.

Form DIR-12 must be submitted to RoC with a copy of the Resignation letter.