After a company’s incorporation, appointment of additional director is not only a crucial administrative requirement but also an important procedural requirement which has to be fulfilled as per the provisions of companies act 2013.
Please remember only an individual can be appointed as a director in a company. This means a company, association, firm or other body with artificial legal personality cannot be appointed as a director.
Section 160 has been introduced in new companies act 2013 in place of the earlier section 257 of old companies act 1956 to deal with appointment of additional directors in a private or public company.
This article will state the procedures, forms required and different time limits related to appointment of new or additional directors in an existing private or public limited company.
Procedure to appoint additional directors in a company
Before getting into the steps that is required to follow for appointment of additional directors, we request to have a look on company’s article of association.
Article of association should allow or authorise to appoint additional directors. If not, then as a first step you need to alter the article of association by allowing or authorising to appoint additional directors.
In the second step, the director has to provide director identification number or DIN to the company. If the director does not have DIN then ask him to apply in form DIR-3 to the central government.
DIN allotment does not take much time. With the help of a chartered accountant or company secretary you can get it delivered within a day. Please read how to get director identification number or DIN
In addition to the DIN of director, the company is also required to collect following documents;
- Form DIR 2: A consent letter to act as director in pursuant to section 152(5) and rule 8 of companies (appointment and qualification of directors) rule, 2014.
- Form DIR 8 – Intimation in pursuant to section 164(2) and rule 14(1) of companies (appointment and qualification of directors) rule, 2014 to the effect that he or she is not disqualified to act as director and the list of companies where he or she is working as a director.
In the third step, company is required to hold a board meeting to pass board resolution for appointment of additional director and also authorise someone to file e-form on behalf of the company with ROC.
In the fourth and final step, company is required to file form DIR-12 within 30 days from the date of passing board resolution for appointment of additional directors. DIR-2 and DIR-8 has to be attached with for DIR-12.
Form MBP-1 as disclosure of director’s interest in pursuant to section 184(1) read with rule 9(1) of companies (meeting of board and its powers) rules, 2014 should also be collected from additional directors and a board resolution should be passed to get it filled in form MGT14 within 30 days from the date of passing board resolution.