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It is possible to add or remove a director from the company at any time. While the articles of incorporation should have provisions allowing it, the Articles of Association and Companies Act provisions dictate how and who can be appointed as a new director. Adding new directors to the company involves following a bunch of procedures
As your company grows and evolves, you will need to bring new talent on board to meet the new requirements and challenges. It is natural to want to add or make changes in the top-level management.
Directors are primarily responsible for the day-to-day operations of a company. Adding or appointing an additional director helps the shareholders assign more operational responsibilities without losing any strategic control.
It could be that the existing directors cannot meet the requirements of the work or maybe even due to retirement, family problems, physical ailments or other personal reasons. In such cases, you need to add new directors.
Every type of company needs a certain number of directors. In case of sudden death or plans of retirement from existing directors, you will have to add another director to your company.
The process of adding a director is more complicated than one might think it to be.
Step 1: Check if the articles (AOA) of the company supports adding an additional director. If there are no such provisions in the AoA of the company, then modify the AoA of the company in a way that allows adding an additional company director.
Step 2: The proposed director must give his or her consent to act as the director via Form DIR-2.
Step 3: The company must pass a board resolution for appointing a particular person as a director of the company.
Step 4: Get DSC (digital signature certificate) and DIN (director identification number) for the new director.
Step 5: Collect the basic documents and information required for the process and get Form DIR-2, Form DIR-12 and Form DIR-8 at ROC done.
This is a simplified version of the process. Vakilsearch will take care of mostly everything in these steps for you. After this basic process is over, there are a few more formalities that need to be completed after this process and our team will explain those to you.
A Director of a Company must be above the age of 18 and must have a Director Identification Number. The person can be an Indian National or a Foreign National.
A Private Limited Company must have a minimum of two Directors at all times. A Limited Company must have a minimum of three Directors at all times.
A new Director can be added to the Board of Director by passing an ordinary resolution in an Annual General Meeting or an Extraordinary General Meeting. Ordinary resolutions can be passed by a simple majority. Once a resolution is passed, the Company must file the Resolution along with the necessary forms and the Digital Signature of the Managing Director or Secretary of the Company, to the Ministry of Corporate Affairs to appoint a Director.
A Digital Signature, Signed Affidavit from the proposed Director and information about the identity and address of the Director is required.