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Director Appointment

Legal Features

PROCEDURE FOR THE APPOINTMENT OF THE COMPANY’S DIRECTOR

  • The Companies Act of 2013 governs the appointing of directors of companies.
  • Every company must have a specific number of directors, as per the Companies Act of 2013.
  • According to the kind of company, the minimum number of directors is also specified.
  • At least three directors are obligatory for a public company, two directors for a private company and a minimum of one director in the case of a one-person company.
  • The highest limit is set at fifteen. If a company wants to designate more than 15 directors, it must adopt a Special Resolution.
  • The company's members have the mandate to appoint or re-appoint the directors of the company at the Annual General Meeting in the event of a Director retiring due to a Rotation of Public Company pursuant to the Rotation section 152(6) of the Companies Act-2013.
  • The same is applicable, in case of regularising the position of the director as additional director duly appointed by the board

To become the director of a company, the below-mentioned requirements must be duly fulfilled

  • Pursuant to Section 152(3) of the Companies Act-2013, an active DIN must be held by the person to be designated/appointed as the company's director.
  • If an individual is disqualified from being appointed as a company's director pursuant to Section 164(2)(a), he/she is not eligible to be designated/appointed as a Director of the Company.
  • No individual who is or was a director of a company that has not submitted/filed financial statements for three consecutive financial years or
  • A person who is not a retired director pursuant to section 152 and is qualified/eligible for the official appointment to the director's office, must be designated/appointed as the director post meeting the following terms.
     
  1. He/she, or another member intending to nominate him/her as the director of the company, has left at the company's registered office, in not less than fourteen days prior to the meeting, a notice in writing under, indicating his candidacy as a director.
  2. He/she, or another member intending to nominate him/her as the director of the company, has left at the company's registered office, in not less than fourteen days prior to the meeting, a notice in writing under, indicating his candidacy as a director or
  3. As the case may be/ Pursuant to the circumstances, such member's purpose to nominate him as a candidate for the director, together with a deposit of one lakh rupees or such higher amount as may be prescribed, which is bound to get refunded, if the person nominated is elected as a director or receives 25% of total valid votes done either via raising of hands or by conducting an official voting/poll on such a resolution.
  4. However, in the case of an appointment of an Independent Director or a Director suggested by the Nomination and Remuneration Committee, or a Director suggested by the company's Board of directors, in such a case in which it is not necessary to form constitute a Nomination and Remuneration Committee, the deposit requirements do not apply

The below-mentioned procedure must be followed for the appointment of the director of a company

  1. Call a Board of Directors' meeting pursuant to  section-173 and Secretarial Standard-1
  2. At least 7 days prior to the date of the Board Meeting, send a notice of the meeting to all of the company's directors at their registered addresses. In the event of an emergency, a notice can also be given at a shorter period.
  3. Attach the Notice with the Agenda, Notes to the Agenda, and Draft Resolution.
  4. Conduct a meeting of the Company's Board of Directors to discuss the topic/agenda, finalise the proposed director's name, and adopt a Board Resolution to
  •  consider the designation/appointment of new directors and the re-appointment of departing/retiring directors, as well as the regularisation of an additional director, all of which are subject to the approval of members at the annual general meeting.
  • to finalise the General Meeting's date, time, and location, as well as to formally approve the draft notice convening the General Meeting, as well as the explanatory statement annexed to the notice, pursuant to  Section 102 of the Companies Act, 2013, and to authenticate the Director or Company Secretary to sign and officially release the notice of General Meeting.
  1. Prepare and distribute Draft Minutes to all Directors for feedback in 15 days post the Board Meeting's end, via hand/speed post/courier/email.

The Proposed Director's formal approval/consent and statement

  • Prior to or post the Board Meeting, it is obligatory for the Proposed Director to duly fill and submit Form DIR-2  and Form DIR-8 to the Company.
     

Getting a Director Identification Number (DIN) and Digital Signature Certificate(DSC)

  • If the person does not possess a Digital Signature, it is mandatory to obtain a Digital Signature from a Certifying Authority in India recognized by the Government of India.
  • The individual must possess a valid DIN issued by the Ministry of Corporate Affairs.

Conduct a General Meeting

  • Notice of a General Meeting must be issued at least 21 days prior to the meeting's official date.
  • It is mandatory that all the Directors, Company Auditors, Secretarial Auditor, Member, Debenture Trustees, and anyone who is entitled to get the notice of the General Meeting shall be notified.
  • Provided, however, that a general meeting may be convened with less notice than that required if agreement/consent is given in writing or electronically and
     
  1. In the event that the company's members convene another important general meeting.
  2. If the company possesses a share capital, having a majority of members authorized to vote and representing no less than 95% of the company's paid-up share capital as grants them voting right at the meeting.
  3. Having not less than 95% of the entire voting power exercisable during the course of the meeting if the company  possesses no share capital:
  4. Issue a letter of appointment to the Company's Director, including the formal terms and grounds of the employment as well as the remuneration to be paid.
  5. Listed companies must report the results of their general meetings to the Stock Exchange within 24 hours of the conclusion of the meeting, and the results must be uploaded on the company's website within two working days.
  6. Within two working days, post the conclusion of the meeting, the Listed Companies must report the details of the vote results to the stock market and upload them on the Company's website.
  7. Within two working days after the meeting's conclusion, the Listed Companies must report the details of the voting results to the stock market and upload them on the Company's website.
  8. Draft the minutes of the General Meeting, have them approved, signed and assembled/compiled in the appropriate manner.

Get Form MBP-1 from the officially Appointed/Designated Director

Obtain the Appointed Director's declaration/statement in the Form MBP-1 mentioning his/her stakes/interests in other entities/firms/businesses.

Officially filing with the ROC the Return of Appointment of Director
Within 30 days following the General Meeting, a Return of Appointment of Directorship (Form DIR-12) must be duly submitted with the ROC, together with a copy of the Ordinary Resolution, Consent/Approval to Act as Director, and a Disclosure regarding his suspensions.
A Company Secretary/Cost Accountant/Chartered Accountant must also certify the return in the case of companies other than OPC and Small Companies.

As an attachment to Form DIR-12, the below-mentioned documents will be needed.

  • Declaration by Director- DIR-8
  • Consent to Act as Director- DIR-2
  • Letter of Appointment

Get the best service for the appointment of the director

  • We, at Careful Counting, provide the best service for the director’s appointment.
  • Every single documentation is taken care of by our team of expert Chartered Accountants and Company Secretaries.
  • Provide us with some basic documents and we will get started right away.

 

Minimum Requirments

  • House property
  • Copy of old ITR which is Earlier Filed
  • Income Statement
  • Balance sheet
  • TDS Certificate
  • TDS Return (all Quarters)
  • Audited Balance Sheet with all schedules

Basic Documents

Books of Accounts

  • PAN card/Pan Number
  • Tax payment challans (Self-assessment, advance tax, if you have deposited the same
  • TDS Deduction Sheet with all deductee details as like PAN, Name, Date of Payment, Amount Credited, etc.
  • All Bank account information

Other Documents

  • For TDS deducted in Apri to February: 7the Day of Next Month of deduction of month
  • For TDS deducted in March: 30th April

Notes

Every business entity which has been registered under the GST Act has to be filed the following GST Return on or before specified due dates.


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