Addition of New Directors in Company
A director of a company is a person who is elected by the shareholders to manage the affairs of the company as per the MOA and AOA. Since the company is an artificial person, it can only function through the agency of a natural person. Thus, a director has to be a living person and the management of the company is entrusted to his board of directors. The appointment of directors may be required from time to time depending on the requirements of the shareholders of the business.
In a private limited company, the directors of the company play a vital role in its functioning. The conduct of the business and the day-to-day decisions are made by the directors. Directors are the key people whom the shareholders of the company trust to invest their money. In this article, we are going to discuss how a company can legally change and incorporate new directors in India.
The first step is to obtain the consent of the proposed directors: The consent of the proposed director is required, as per Form DIR-2 it is a very important document and the company is required to obtain Form DIR-2 before offering it. company director.
Digital Signature Certificate of Proposed Directors
- If the proposed directors of the company do not have a digital signature, they need to obtain DSC. Apply now for DSC.
- Obtain Director Identification Number (DIN): If the proposed director does not have a DIN, the company should apply for the proposed person's DIN. This resolution is to be attached with Form DIR3. This DIN once allotted can be used for a lifetime. DIN can be obtained for anyone above the age of 18 years. Also, the nationality of the proposed does not matter. Therefore, Indian citizens, non-resident Indians, and foreign nationals can obtain DIN and get appointed as directors in a private limited company in India.
- The company must obtain all the KYC documents along with the required educational qualification documents as per the job conditions. Also, there is no minimum educational qualification for holding the post of Director in a company in India.
Who is the Director in a Private Limited Company?
The Companies Act, 2013 defines the term director as a person appointed on the board of a company. The board of directors is a group of persons who are elected by the shareholders of the company to manage the affairs of the company. Since a company is an artificial legal person created by law, the company can only act through the agency of natural persons. Directors can act only through human beings and directors through whom the company primarily functions. The board of directors is the body of persons on which the management of a company is entrusted.
By other definitions, a director is someone who administers, controls or directs something. A director is someone who supervises, controls, or manages. He is a person who is elected by the shareholders of the company to guide the policies of the company; He is a person appointed or elected under law, and who is authorized to manage and direct the affairs of the company.
Types of Directors in the Company
A managing director is a director by virtue of the articles of association of a company or an agreement with the company or a resolution passed by the board of directors at the general meeting or. As the Board of Directors has been entrusted with substantial powers to manage the affairs of the company.
Whole-time director or executive director
Someone who is in full-time employment at the company is an executive director or a whole directory.
An ordinary director is an ordinary director who attends the meetings of the board of a company and takes part in matters that are placed before the board of directors. These directors are not whole-time directors or managing directors.
An additional director is a person appointed by the board of directors between two annual general meetings, subject to the provisions of the company's articles of association. Additional directors should hold office only till the date of the next Annual General Meeting of the company. However, the number of directors and additional directors of a company together should not exceed the maximum strength fixed for the board of directors by the Articles of Association.
The Board of Directors called upon the original director to act for a director at the general meeting during his absence for at least three months. In most cases, alternate directors are appointed for a person who is a non-resident Indian or for foreign associates of a company.
A professional director is a director with professional qualifications and has no pecuniary interest in the company. These professional directors are sometimes appointed on the board to exercise their expertise in managing the company.
Banks and private equity investors who provide equity support to a company usually impose a condition for appointing their representative on the board of the company concerned. These nominees are called nominee directors.
In the case of a one-person company, a nominee director is a person nominated by the sole director of a one-person company to handle the affairs of the OPC, in case of death or incapacity of the sole director.
Maximum and Minimum Number of Directors in a Private Limited Company
A corporate body of the business entity cannot be appointed as a director in a private limited company. Therefore, only one person can be appointed as a director in the company. A private limited company can have a maximum of fifteen directors and the number of directors can be increased further by passing a special resolution.
What is the minimum number of directors the following entities can have?
- Private Limited Company – There can be at least two directors.
- Limited Company – Minimum three directors.
- One Person Company- Minimum one Director.
- Director in Private Limited Company - Residency Requirement
There is no such requirement as per the Companies Act, 2013 which prohibits the appointment of a foreigner or NRI as a director of the company. Section 149(3) also provides that every company must have at least one director who has been in India for a total period of not less than one hundred and eighty-two days in the previous calendar.
Requirement of female director in the company
At least one woman director is to be appointed in case of listed companies and limited companies having paid-up share capital of Rs.100 crore or more or turnover of Rs. 300 million.