The Company’s Articles of Association (hereinafter referred to as ‘AOA’) give the Board of Directors the authority to appoint any person as an Additional Director at any time, who will serve until the next Annual General Meeting or until the last date on which the Annual General Meeting should have been held, whichever comes first. [Section 161(1)]
1. The Board of Directors will not nominate a Director who has previously been denied appointment as a Director at a General Meeting [Section 161(1)].
2. The company’s AOA must permit the Board of Directors to appoint an Additional Director. [Section 161(1)].
3. After the appointment of an Additional Director, the total number of Directors in the Company should not exceed the maximum limit. [section 149(1)].
4. The person who will be designated as an Additional Director must have a valid DIN number. [Section 152(3)].
Procedure for appointing additional director
- Check the AOA of the Company-Refer to the AOA; if the appointment of the Additional Director is not approved by the AOA, it must be changed.
- Obtain Written Consent and Declaration from the Proposed Additional Director-The Company must receive Form DIR-2 (Consent to Act as a Director) and Form DIR-8 (Intimation by Director of his Disqualification) from the Proposed Additional Director. In addition, such a person must make a declaration that he meets the requirements for appointment as a Director.
- Obtain Form MBP-1 from the Proposed Additional Director-The individual who is intended to be nominated as an Additional Director must provide a disclosure of interest in Form MBP-1 to the company.
- Obtaining DIN and Digital Signature Certificate [Section 153]
- If the individual does not have a digital signature, he must get one from an Indian Certifying Authority.
- The individual must possess a valid DIN issued by the Ministry of Corporate Affairs. Currently, only the company where he or she is planned to be appointed can submit an application for a DIN to MCA.
- The application for DIN must be countersigned by a director of the company, and the person must also submit a copy of the resolution approving the proposal of appointment in Form DIR-3 with MCA, along with his ID proof and address proof, duly digitally signed by him and a director of the company in which the appointee is intended to be appointed as director.
- Attachments for DIR-3 are as follows:
- One Passport Size Photo in JPG/JPEG Format
- Board Resolution proposing his appointment as director in an existing company
- Specimen signature duly verified
- ID Proof- Driving License/Passport/Election Voter ID Card
- Residence Proof- Utility Bill (Electricity Bill/Telephone Bill)/Bank Statement/Mobile Bill
- Other Mandatory Attachments- Income Tax PAN (For Indian National), Passport (For Foreign Nationals)
- Other Attachments- Aadhaar Card.
- Meeting of Nomination and Remuneration Committee– Where a Company is obliged to form a Nomination and Remuneration Committee under section 178, the Board of Directors of the Company will receive a recommendation from the committee for the appointment of an Additional Director.
- Issue a notice for Board Meeting at least seven days prior to the meeting. Convene a Board Meeting. Hold a meeting of Board of Directors of the Company and pass the following Resolutions:
- to appoint an Additional Director
- to take note of the disclosure of Interest received from the Additional Director
- to authorise the Company Secretary or any Director to sign and submit the required document with the Registrar of Companies, as well as to perform any other actions, deeds, or things necessary to carry out the Board’s decision.
- Prepare and distribute Draft Minutes to all Directors for feedback within 15 days after the Board Meeting’s end, via hand/speed post/registered post/courier/e-mail.
- Filing of Return of Appointment of Director with the ROC-Within 30 days following the Board meeting, a Return of Appointment of Directorship (Form DIR-12) must be submitted with the Registrar, together with a copy of the Board Resolution, Consent, and Declaration. A Company Secretary/Chartered Accountant/Cost 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 following documents will be provided:
- Certified True Copy of the Board Resolution passed
- DIR-2 Consent to Act as Director
- DIR-8 Declaration by Director
- Letter of Appointment.
- Making Necessary entries in Register of Directors-In Form MBP-4, the company should make the required entries in the Register of Directors and Key Managerial Personnel, as well as the registers of contracts and arrangements in which the directors have a stake.
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