In the intricate world of corporate governance and management, the appointment and regularization of directors play a crucial role in shaping the destiny of a company. Among these roles, the “Additional Director” stands as a significant player, often appointed after a company’s initial board formation. This article delves into the complexities and procedures surrounding the appointment and regularization of additional directors, with a specific focus on Section 161(1) of the Companies Act, 2013, as its guiding light.
Additional Director: Appointment and Regularization
An “Additional director” is an individual appointed by a company’s board of directors after its initial formation. This appointment can occur during a special board meeting or at the annual general meeting. Additional directors share the same rights and responsibilities as other board members, actively participating in the governance and decision-making processes of the company.
Section 161(1) of the Companies Act, 2013
According to Section 161(1) of the Companies Act, 2013, the company’s Articles empower the Board of Directors to appoint any person (excluding those failing to get appointed in a general meeting) as an additional director. An additional director’s term lasts until the next AGM or the last date when the AGM should have taken place, whichever comes earlier.
To regularize the appointment of an additional director as a full Director of the company, the following Ordinary resolution must be passed at the Annual General Meeting:
“RESOLVED THAT pursuant to provisions of Sections 152, 161 and all other applicable provisions, if any, of the Companies Act, 2013 and Companies (Appointment and Qualification of Directors) Rules, 2014, including any enactment, re-enactment or modifications thereof, Name of Director (DIN:) who was appointed as Additional Director by the Board of Directors of the company at their meeting held on Date, and who holds office up to the date of this Annual General Meeting be and is hereby appointed as the Director of the Company.
RESOLVED FURTHER THAT the Board of Directors of the Company be and is hereby authorized for and on behalf of the Company to take all necessary steps and to do all such acts, deeds, matters and things which may deem necessary in this behalf.”
DUE DATE FOR FILING FORM DIR-12
The company shall file E-form DIR-12 with the ROC for such appointment/regularization within 30 days from the date of such appointment.
PROCEDURE FOR APPOINTMENT OF ADDITIONAL DIRECTOR
1. Send a notice calling Board meeting for the appointment of Additional Director to all the directors of the company.
2. Hold a Board meeting and pass the following resolution:
“RESOLVED THAT pursuant to provisions of Sections 152, 161(1) and all other applicable provisions, if any, of the Companies Act, 2013 and Companies (Appointment and Qualification of Directors) Rules, 2014, including any enactment, re-enactment or modifications thereof, Name of Director (DIN:) be and is hereby appointed as the Additional Director of the company who shall hold office up to the date of ensuing Annual General Meeting.”
3. File form DIR-12 with the ROC within 30 days from the date of such appointment.
ATTACHMENTS IN FORM DIR-12
i. Consent in Form DIR-2
ii. Letter of appointment
iii. Resolution (optional)
PROCEDURE FOR REGULARIZATION OF ADDITIONAL DIRECTOR
1. Hold a Board meeting and pass resolution to send a notice to all the members of the company for regularization of the Additional Director along with the explanatory statement.
2. Hold the Annual General Meeting and pass the following Ordinary resolution:
“RESOLVED THAT pursuant to provisions of Sections 152, 161 and all other applicable provisions, if any, of the Companies Act, 2013 and Companies (Appointment and Qualification of Directors) Rules, 2014, including any enactment, re-enactment or modifications thereof, Name of Director (DIN:) who was appointed as Additional Director by the Board of Directors of the company at their meeting held on Date, and who holds office up to the date of this Annual General Meeting be and is hereby appointed as the Director of the Company.
3. File form DIR-12 with the ROC within 30 days from the date of such change in designation.
FEE FOR FILING E-FORM DIR-12:
1. In case of company having share capital:
| Nominal Share Capital | Fee applicable |
| Less than 1,00,000 | Rupees 200 |
| 1,00,000 to 4,99,999 | Rupees 300 |
| 5,00,000 to 24,99,999 | Rupees 400 |
| 25,00,000 to 99,99,999 | Rupees 500 |
| 1,00,00,000 or more | Rupees 600 |
2. In case of company not having share capital:
Fee applicable – Rupees 200
ADDITIONAL FEES IN CASE OF DELAY
| Period of delay | Fee applicable (INR) |
| Up to 30 days | 2 times of normal fees |
| More than 30 days and up to 60 days | 4 times of normal fees |
| More than 60 days and up to 90 days | 6 times of normal fees |
| More than 90 days and up to 180 days | 10 times of normal fees |
| More than 180 days | 12 times of normal fees |
Conclusion: In conclusion, this article has shed light on the intricate and highly regulated processes surrounding the appointment and regularization of additional directors, emphasizing the importance of compliance, transparency, and accountability in the governance of companies. In a world where adaptability and legal adherence are paramount, understanding these procedures is not just a requirement but a cornerstone of responsible corporate management.
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Disclaimer: This blog provides information and knowledge and should not be considered a solicitation for any purpose. For further clarification, contact the author at 9953808432 or via mail at [email protected], the founder of SINGHANIA & ASSOCIATES, a Practicing Company Secretaries Firm based in Delhi.
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