If you want detailed knowledge about the resolution process for the Appointment of a Director in a company, check out the given details in this article, a step-by-step guide to choosing your resolution for the appointment of a director.
The authority to control the matters of management of a company lies in the hands of its directors, collectively known as the Board of Directors (BOD). The Director is responsible for managing these matters and ensuring that the company is achieving its goals and strategies as per the Articles of Association (AOA) and Memorandum (MOA) of the company. Usually, the shareholders appoint an individual as the director in the general meeting of the company. These appointments keep changing with time. Before his appointment, the consent of the director must be obtained. learn more about Resolution for the Appointment of a Director
Types of Directors of a Company
There are various types of directors in a company, which are as follows:
- Executive Director – He or she is also known as a whole-time director, who is a full-time employee for a company.
- Managing Director – A managing director becomes a director by virtue of an agreement with the company or resolution passed by the shareholders or Board of Directors.
- Ordinary Director – They attend only the Board Meeting or meeting on important matters.
- Alternate Director – They are appointed for persons like NRIs or foreign collaborators of the company. They are appointed by the Board of Directors to act in the absence of the original director.
- Nominee Director – Private Equity investors, banks or other third parties that grant equity or debt assistance to a company usually put a condition as to appoint their representative on the BOD of the company. The nominated persons appointed on the Board are called Nominee Directors.
- Professional Director – They acquire professional qualifications but do not have enough financial interest in the company.
Minimum and Maximum Limits in the Number of Directors of the Company
For a public limited company, the minimum number of directors should be 3, and the maximum limit is 15. For a private limited company, the minimum limit for directors should be 2, and the maximum limit is 15. If it is a ‘One Person Company’ (OPC), the minimum limit number of directors is 1.
In a public limited company or a private limited company (which is a subsidiary of any public company), two-thirds of the total Appointment of a Director by the shareholders. The remaining is appointed in the manner prescribed in the Articles (AOA). If it is not done in this manner, then the shareholders must appoint the remaining one-third of the Directors.
In a private limited company (which is not a subsidiary of any public company), the Articles can prescribe any manner of appointment of a director in private company . In case the Articles are silent, the shareholders will appoint the Directors.
Qualifications to be the Director of a Company
To qualify as a director of the company, an individual must possess the given qualities:
- He or she must be eligible under the clauses of the AOA of the company.
- He or she must obtain a director identification number (DIN) and a digital signature certificate (DSC). Anyone above the age of 18 can obtain a DIN.
- The proposed director must furnish his DIN and a certificate that he or she is not disqualified under any Act.
- The proposed director shall, on or before Appointment of a Director must give his consent in form DIR-2 (Consent to act as a director of company).
- Non-Resident Indians (NRIs) and Foreign Nationals can also be appointed as a director in India.
- He or she should not have been sentenced to imprisonment for any time period, or any fine is not imposed under any Act.
- He or she should not have been convicted for any time period under the Conservation of Foreign Exchange and Prevention of Smuggling Activities Act, 1974.
- He or she must be above the age of twenty-five years but is less than seventy years of age. However, this limit is not applicable if the Appointment of a Director is approved by the Central Government or by a special resolution passed by the company in a general meeting.
List of Documents Required to Appoint a Director
Here is the list of required documents to be furnished by the individual if his or her appointment takes the place of a private limited company and a public limited company.
- Self-attested copy of PAN: https://www.pan.utiitsl.com/
- Self-attested copy of address proof and identity proof (Aadhar card, Passport, or Election card)
- Consent to act as a director in the company in form DIR-2
- Copy of the resolution passed by the shareholders
- Notice for the shareholders’ meeting in which he was Appointment of a Director
- PAN card: Mandatory for an Indian Applicant
- Passport: Mandatory for a foreign Applicant
Board Resolution in the Appointment of a Director
The board usually holds meetings as required by any special occasion. These meetings generally take place at the Company’s registered office. The duration of each meeting typically runs to half a day, depending on the importance of the matter.
‘A Certified Specimen of the Resolution Passed at the Board Meeting of the (Company Name) Held at its Registered Office at (Address) at (Time) on (Date)’
Resolved that as per the provisions of section 161 or other applicable provisions of the Companies Act, 2013 and rules framed therein, including any re-enactment or modification. Thereof, read with the Articles of Association, (Mr./Ms. Director Name), who has declared his or her consent in the Form DIR-2 if appointed, to act as a Director, and is hereby appointed as an additional director of the Company, who shall hold the office up to the date of immediate Annual General Meeting or the date on which the Annual General Meeting should have been held, whichever is earlier.
Further resolved that to give effect to this resolution, Mr._______, Director, is hereby authorized to do all acts, matters, deeds, and things as necessary or proper and to sign and execute all necessary documents, returns, and applications along with the filing of necessary E-form with the Registrar of Companies.
For
(COMPANY NAME)
(Director Name)
Conclusion
Following all the legal rules is essential for the smooth functioning of the management and the company as a whole. Understanding the process of resolution for appointment of director is essential as a director or a Board of Directors is responsible for monitoring the performance of the management, the company’s financial position, adherence to the standards of the company, and more information contact vakilsearch
Also, Read:
- What Is the Procedure To Remove a Director From a Company
- How Many Women Directors Are Appointed by a Listed Company?
- Types of Directors in Companies under Act, 2013
- List of Directors of Companies
- Consultancy Service Agreement
- How to become a Director of an Organization?
- What Are the Mandatory Requirements for the Removal Process?
