{"id":5652,"date":"2019-04-29T09:25:04","date_gmt":"2019-04-29T09:25:04","guid":{"rendered":"https:\/\/companyregistrationonline.in\/?p=5652"},"modified":"2020-10-07T12:16:41","modified_gmt":"2020-10-07T12:16:41","slug":"appointment-of-director","status":"publish","type":"post","link":"https:\/\/companyregistrationonline.in\/blog\/appointment-of-director\/","title":{"rendered":"Appointment of Director as per the Companies Act"},"content":{"rendered":"

A director is an individual who has the responsibility of directing, managing, and controlling the affairs of the company. The objective of the appointment of the director is to determine and implement the policies, once the Company Registration<\/a> is complete. They need to manage the business and other affairs, by the provisions of The Company Act, 2013.<\/p>\n

The appointment of the Director is an essential part of the growth and management of the Company. This board of directors is entrusted to perform the duties and functions of a company.<\/p>\n

Appointment of Director is covered under Section 152\u00a0of Companies Act 2013<\/a>, along with Rule 8 of the Companies (Appointment and Qualification of Directors) Rules, 2014.<\/p>\n

\n\n\n\n\n\n\n
Types of Company<\/em><\/a><\/strong><\/th>\nDirectors<\/em><\/strong><\/th>\n<\/tr>\n<\/thead>\n
Public Company or a Private Limited Company Registration<\/a> is done as a subsidiary or associate of a Public Company.<\/td>\n\n
    \n
  1. Two-third of total Directors are to be appointed by the shareholders.<\/li>\n
  2. Balance one-third appointment is made as per the Articles of Association (AoA)<\/a>. If not then the shareholders shall appoint the remaining.<\/li>\n<\/ol>\n<\/td>\n<\/tr>\n
A Private Limited Company<\/a> is not a subsidiary or associate of a Public Company.<\/td>\n\n
    \n
  1. The AoA prescribes the manner of appointment of any or all the Directors.<\/li>\n
  2. If not then the Directors must be appointed by the shareholders.<\/li>\n<\/ol>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/div>\n

    Note:<\/strong> The Companies Act also permits the AoA to provide for the appointment of two-thirds of the Directors following the principle of proportional representation, if adopted in the particular company registration<\/a>.<\/p><\/blockquote>\n

    Nominee Directors can be appointed by the Central Government or\u00a0a third party, in the case of oppression or mismanagement.<\/p>\n

    Number of Directors<\/strong><\/h3>\n

    One Person Company<\/a> (OPC):\u00a0<\/strong>Minimum 1, Maximum 15<\/p>\n

    Private Limited Company<\/a>:<\/b>\u00a0Minimum 2, Maximum 15<\/p>\n

    Public Limited Company:<\/b>\u00a0Minimum 3, Maximum 15<\/p>\n

    Appointment of Director over 15 is allowed after passing a special resolution (with 75% or more members consenting) in general meeting.<\/p>\n

    Further,<\/strong> there has to be at least one appointment of director who has resided within the country for at least 182 days in the previous calendar year.<\/p><\/blockquote>\n

    Qualifications for Directors<\/strong><\/h3>\n

    The Companies Act 2013, does not prescribe any qualifications for Directors of any company. However, as per various provisions mentioning the appointment of a director, the following conditions must be applied:<\/p>\n

      \n
    1. A director must be an individual,\u00a0as per Section 149(1),<\/li>\n
    2. The person should be of sound mind,<\/li>\n
    3. He must hold share qualification if the AoA provides for it.<\/li>\n
    4. A director should be a solvent person,<\/li>\n
    5. He must not have a history of any conviction under any court for any offense.<\/li>\n<\/ol>\n

      A company may prescribe qualifications for appointment of director, in its AoA.<\/p><\/blockquote>\n

      The Act, however, limits the specified share qualification of Directors which can be prescribed, to be less than Rs. 5,000\/-. The company, in this regard, is to be a public company or its subsidiary.<\/div>\n
      \n

      Documents required for Appointment of Director<\/strong><\/h3>\n
        \n
      1. Apply for DIN<\/strong>: A person must have Director Identification Number, i.e. DIN, as per Section 154, to become\u00a0a Director. This can be obtained online by filing DIR -3 on MCA.<\/li>\n
      2. Apply for DSC<\/strong>: To apply for DIN, you need to register Digital Signatures (DSC) in India. The appointment of the director can be done only with their digital signature and so the first step is to create DSC.\n