Section 161(1) of the Companies Act, 2013 read with Companies (Appointment & Qualification of Directors) Rules, 2014.
Above mentioned helps to clarify the provision of appointment of Additional Director alongwith term of appointment. Provision specified that if Article mentioned then power is in the hands of Board of Directors to appoint Additional Director of the company and Additional Director is only for the term which is only upto the next Annual General Meeting or the last date on which the Annual General Meeting needs to held whichever is earlier.
Most important is that total strength of the director must not be increased as fixed by the Board.
Procedure for the appointment of Additional Director:
1. Article Authorisation: There must be power in the article of association of the company to appoint Additional Director of the Company.
2. Disqualification of Director: Director going to appoint as Additional Director must not be suffer from the disqualification mentioned.
3. Consent: There must consent from the Director before appointment to act as additional director.
4. DIN: There is requirement to see whether the person have the DIN or not, if doesn’t have then before then needs to apply of Director Identification Number and after the allotment he can be the additional director of the company.
5. Notice of Board Meeting: In accordance with the Section 173 of the Companies Act, 2013 for holding Board meeting, notice must be sent.
6. DIR-12: Form DIR-12 along with DIR-2 (Declaration), Letter of Appointment within 30 days of appointment and incase of Listed Company also have to inform to Stock Exchange as well.
7. Register of Director: Particulars of the appointed director must be mentioned in the register of Director.
8. Information to other Company: After the appointment of Additional Director needs to inform the other Companies in which he is already a director.