Add / Remove Director
Directors are appointed by shareholders to manage a company as per
the provisions of the Companies Act, 2013. A Private Limited
Company is mandated to have at least two Directors & maximum of 15
Directors, while a Public Limited Company requires a minimum of
three Directors & maximum of 15 Directors. Lexprosoft Providers
facilitate the necessary filings for adding or removing Directors
in companies.
When appointing or resigning/removing a Director:
- • The individual must be at least 18 years old.
- • They must possess a Director Identification Number (DIN) issued by the Ministry of Corporate Affairs (MCA) for appointment.
- • Foreign nationals are eligible to serve as Directors in Indian companies. However, an Indian company must have at least one director who is an Indian resident i.e. Who has stayed in India for a total period of at least 182 days during the financial year.
- • Board resolutions must be duly passed to approve appointments and accept resignations of Directors.
To add a Director, obtaining a Digital Signature Certificate (DSC)
for the proposed appointee is the initial step. Upon securing the
DSC, the appointment can proceed with shareholder consent. When
removing a Director, it is crucial to ensure compliance with the
minimum required number of Directors post-removal. The resignation
letter, accompanied by requisite forms, must be filed to
effectuate the resignation.
This process ensures adherence to legal requirements and
facilitates seamless governance transitions within companies.
Documents Required for Appointing or Resigning/Removing a Director
Here are the refined and professionally worded requirements for
notifying the Registrar of Companies (ROC) about changes in
Directors for companies and changes in LLP agreements:
For Company Director Changes:
Required Information:
Required Documents:
Advantages of Add / Remove Director
1. Introduction of New Expertise: Each department's input is
crucial for business growth. A new director can bring specialized
knowledge, innovation, and enhanced work ethics to the company.
2. Absence of Ownership Obligation: Directors oversee daily
operations without the requirement to subscribe to share capital.
Consequently, there is no encumbrance on ownership or voting
rights of shareholders with the appointment of a new director.
3. Addressing Inadequacies: It is essential for a company to
mitigate any inefficiencies stemming from current directors who
may not be performing effectively due to personal reasons, aging,
or other factors. Adding or replacing a director can alleviate
such shortcomings.
4. Compliance with Legal Requirements: Private limited & Section 8
companies are legally obligated to maintain a minimum of two
directors, Public limited & Nidhi companies are legally obligated
to maintain a minimum of three directors and One Person Company
are legally obligated to maintain a minimum of one director .
Ensuring adherence to this statutory requirement is critical, and
the number of directors should not fall below this prescribed
limit.
These considerations underscore the strategic and regulatory
importance of directorship changes within a company, facilitating
improved governance and operational efficacy.
Procedure for Registration
Procedure for appointing or resigning/removing of Directors:
Step 1:
Initiation appointing or resigning/removing of Director,
MYDEARCITY
facilitate changes to the Board of Directors of your Company or
LLP by managing additions or removals of Directors. Our experts
begin by comprehensively understanding the proposed changes and
requesting the necessary information and documentation from you.
Step 2:
Preparation of Documentation Our experts assist in
preparing the requisite documentation tailored to the specific
changes proposed for the Board of Directors. These documents are
meticulously crafted to comply with regulatory requirements and
ensure accuracy.
Step 3:
Submission of Documentation Following the preparation of
internal documents or resolutions, our experts proceed to formally
file them with the Ministry of Corporate Affairs (MCA). This step
ensures that the changes to the Board of Directors or LLP are
effectively processed and officially recognized.
This structured approach ensures seamless governance transitions
and adherence to legal procedures, enabling smooth operational
continuity for your company.
Choose Lexprosoft for Add / Remove Director
Lexprosoft provides expert services for appointing or
resigning/removing a director, ensuring a smooth and compliant
process. With in-depth knowledge of the Companies Act, 2013,
Lexprosoft handles everything from drafting necessary documents,
such as board resolutions and notices, to filing Form DIR-12 with
the Registrar of Companies (ROC). Their end-to-end assistance
ensures that your company meets all legal and regulatory
requirements while tailoring the process to suit your specific
needs. Trust Lexprosoft for a hassle-free and professional
experience in managing director changes effectively.
Contact our Experts today and take the first step towards your
startup success!
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Add / Remove FAQ's
Why would a company need to add a director?
A company may need to add a director to meet regulatory requirements, to bring in new expertise, to comply with minimum director requirements under the Companies Act, 2013, or to enhance the company’s management structure for growth.
Can a company have a director who is not a shareholder?
Yes, a company can appoint a director who is not a shareholder. Directors do not need to own shares in the company, although they may be a part of the company’s equity structure in some cases.
What happens if a director is removed from the board?
Removing a director results in their cessation of authority over the company's operations. Their powers and responsibilities are terminated, and they no longer hold any fiduciary duties or rights within the company’s management.
Can a director be removed before their term ends?
Yes, a director can be removed before the completion of their term through a resolution passed by the shareholders at a general meeting, subject to the company’s articles of association and provisions of the Companies Act.
Is it necessary to provide a reason for removing a director?
Generally, it is not required to provide a reason for removing a director under the Companies Act, unless the director is being removed due to personal misconduct, failure to perform duties, or breach of trust, in which case, disclosure might be required.
Can a company remove a director who is also a shareholder?
Yes, a director who is also a shareholder can be removed from the board of directors. However, if they hold shares, the removal process could be more complex, as it may involve altering voting rights or shareholder agreements.
What is the effect of adding a director on the company’s management?
Adding a director increases the company's governance capacity, enhancing decision-making, bringing in new ideas or expertise, and helping to distribute the workload. It may also improve the company’s legal compliance with mandatory director requirements.
Can the addition of a director be blocked by other board members?
Yes, if there are specific provisions in the company’s articles of association or shareholder agreements, the addition of a director may require approval by a certain majority or the consent of other board members before it is officially passed.
What happens to a director’s position when they resign?
When a director resigns, they voluntarily relinquish their responsibilities and authority within the company. Their resignation must be acknowledged by the board, and the position becomes vacant, subject to the company's internal regulations.
Can a company remove a director for non-compliance with regulations?
Yes, a company can remove a director if they fail to comply with legal or regulatory obligations, such as non-filing of annual returns or violation of corporate governance standards, as per the provisions in the Companies Act, 2013.
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