PROCEDURE FOR APPOINTMENT OF THE DIRECTORS

A Board of Directors is an elected group of individuals that represents the shareholders of the Company. The board is a governing body that meets at regular intervals to set corporate management and oversight policies.

As per the Companies Act, 2013, Every Company shall have a Board of Directors consisting of individuals as directors and shall have:

WAYS OF APPOINTMENT OF DIRECTORS:

• By the articles of association as first directors:

         the subscribers to the memorandum who are individuals shall deemed to be the first directors of the company until the directors are duly appointed and in case of a One Person Company, an individual being member shall be deemed to be its first director until the director or directors are duly appointed by the member in accordance with the provisions of the Act.

• By the company in general meeting:

As per the provisions, save as otherwise expressly provided in the Act, every director shall be appointed by the company in a general meeting of the members or shareholders.

• By the board of directors:

The general power to appoint the directors is through the general meeting of the members or shareholders but in few cases, subject to the articles of the company, even the board of directors can appoint new directors like

1. Additional director: The Board of Directors has the power to appoint any person, other than a person who fails to get appointed as a director in a general meeting, as an additional director at any time who shall hold office up to the date of the next annual general meeting or the last date on which the annual general meeting should have been held, whichever is earlier.
2. Alternate director: The Board of Directors of a company may appoint a person, not being a person holding any alternate directorship for any other director in the company 3[or holding directorship in the same company], to act as an alternate director for a director during his absence for a period of not less than three months from India.

• By lenders:

Under definite conditions, the articles may authorize the banking company, debenture holders, and a financial corporation to appoint their nominations to the board of directors called as nominee director.

• By the central government:

The central government has the power to appoint the directors to avoid oppression or mismanagement and the appointment of the directors may be made for the time period not beyond three years at a time.

IMPORTANT PROVISIONS REGARDING APPOINTMENT OF DIRECTOR

1. No person shall be appointed as a director of a company unless he has been allotted the Director Identification Number.
2. A person appointed as a director shall not act as a director unless he gives his consent to hold the office as director and such consent has been filed with the Registrar within thirty days of his appointment in such manner as may be prescribed.
3. The maximum number of directors a company can appoint is 15 (fifteen) although a company may appoint more than fifteen directors after passing a special resolution in general meeting.
4. No person shall hold directorship in more than 20 companies and 10 in case of public company. For counting the limit, dormant company and company licenced under section 8 subject to condition are excluded.
5. No person shall be eligible to be appointed as a director of a company if he has been disqualified as per provisions of Section 164 of the Companies Act, 2013.

FORM TO BE FILED FOR APPOINTMENT OF A DIRECTOR

For appointment of a Director, the Company shall file e-Form DIR-12 with ROC along with such mandatory documents as attachments to the e-form within a period of 30 days from the date of his/her appointment.

MANDATORY ATTACHMENTS TO THE FORM DIR-12

1. Resolution passed by the Company for the appointment of the Director.
2. Letter of Appointment by the Company.
3. DIR-2 (Consent to act as Director of the Company)
4. DIR-8 (Intimation by Director [Pursuant to Section 164(2) and rule 14(1) of Companies (Appointment and Qualification of Directors) Rules, 2014]) and MBP-1
5. Interest in other entities of director, in case the director holds interest in more than one entity.