A change in the directorship of a company includes the addition and removal of a director, and it can be voluntary change or due to demand in change. If there is a death or resignation of the existing director then a demand can arise and to change the directorship one must follow the rule specified under the Companies Act.
Passing an ordinary resolution in an annual general meeting or an extraordinary general meeting, a new director can be appointed or added to the board of directors. The appointed director must obtain the director identification number that is allotted by the ministry of corporate affairs. The newly appointed director must be at least 18 years old and should have given consent to serve. The nationality of the director does not come into the picture, as a foreign national can also be appointed as director of an Indian company. In some circumstances where it is not feasible to wait for an AGM and neither it is possible to call an extraordinary general meeting, then the company can add a director in a board meeting and then later it can regularise such director in the upcoming AGM. The director who has been appointed should have a digital signature, director identification number, and submit his consent to act as a director in form DIR-2.
To add a director a notice has to be sent to all directors to call the board meeting, To call the board meeting a general meeting they have to pass a board resolution, and send notice to all the shareholders. They have to pass a resolution in AGM or EGM and file form DIR- 12 with the ministry of corporate affairs.
A company in an annual general meeting or an extraordinary general meeting can remove a director by passing an ordinary resolution, this resolution has to be passed by a simple majority. If a private limited company that has only 2 directors has caused a vacancy by the removal of a director then the appointment of a new director must be within 6 months from the date of resignation of the previous director.
If the director himself gives resignation then the company will have to hold a board meeting by giving 7 days of clear notice, the board will then discuss whether to accept the resignation or not, if the board accepts the resignation then a board resolution accepting the resignation is passed after that form dir- 11 needs to be filled by an outgoing director that has to be attached with a board resolution, proof of delivery of the resignation letter and the copy of resignation letter. The company will have to fill form dir- 12 and it has to be filed with the registrar of companies and a resignation letter and board resolution have to be attached with it. After the forms are filed, the ministry of corporate affairs will remove the name of the director from the master data of companies.
If the board takes so Moto action to remove a director then they have to call about meeting by giving 7 days notice to all the directors which will inform them about the removal of a director. The more meeting will have to pass a resolution to hold an EGM as well as they have to pass a resolution for removal of the director which will need the approval of the shareholders. 21 days clear notice will be given and in a general meeting the members will be asked to vote for the matter and if the majority favors the decision then the resolution will be passed. The director will be given the opportunity of being heard before any resolution is passed. After the resolution is passed the director will have to fill the form dir- 11 and the company will fill DIR- 12 and both of them will have some attachments of ordinary resolution as well as board resolution. Once the forms are filed, the ministry of corporate affairs will strike off the name of the director.
This Article Does Not Intend To Hurt The Sentiments Of Any Individual Community, Sect, Or Religion Etcetera. This Article Is Based Purely On The Authors Personal Views And Opinions In The Exercise Of The Fundamental Right Guaranteed Under Article 19(1)(A) And Other Related Laws Being Force In India, For The Time Being.
