Any Public Limited Company has to have at least three directors at any given time. The change in the directorship of a company is possible at any time as and when needed. The change includes the addition or removal of Public Limited Company directors. In addition, to exhibit the change a company must follow the rules specified under the Companies Act. Addition or removal of Public Limited Company directors can be done by passing a resolution in the general meeting.
Addition Of Director in Public Limited Company
The addition of the director can take place in a company only in a general meeting with the approval of the shareholders. Further, this takes place through an annual general meeting or by calling an extraordinary general meeting. However, sometimes it is not feasible to wait for an AGM or to call an extraordinary general meeting. In such circumstances, a company can add an additional director in a board meeting and later on it can regularize such director in the upcoming AGM.
Pre-requirements for Addition of Directors
- Digital Signature.
- The director must have DIN.
- Consent to act as a director in Form DIR-2.
Process for addition of Directors of Public Limited Company
- In Annual General Meeting or Extraordinary General Meeting
- Notice to all directors to call a Board Meeting
- Pass a Board Resolution to call General Meeting.
- Further, send notice of General Meeting to all the shareholders.
- Pass resolution in AGM or EGM for addition of director.
- File form DIR-12 with MCA within 30 days of appointment.
- Appointment by Directors
- Send Notice to all directors to call a Board Meeting.
- Pass Resolution for appointment of Director.
- File Form DIR-12 with MCA after appointment.
- At the time of AGM, pass a resolution to regularize the additional director.
Removal of Director in Public Limited Company
There can be three possible reasons for Removal of Director:
- Director voluntarily gives his resignation
- Removal of director suo-moto by the board.
- If the director does not attends 3 continuous board meeting.
Voluntary Resignation of Directors
- The Director willing to resign submits his resignation to the Board.
- Further the company holds a board meeting giving 7 days of clear notice. (Clear notice means 21 days notice excluding the day on which the notice was sent and received)
- Board in the Board Meeting shall decide whether to accept the resignation or not.
- Once the Board accepts the resignation of Director they will pass a Board Resolution.
- Further the director shall file form DIR-11 along with the copy of Board Resolution and copy of resignation letter.
- The company shall file Form DIR-12 with MCA.
- After filing all the forms, the name of the director will be removed from the master data of the Company on the Ministry of Corporate Affairs website.
Removal of director Suo-moto by Board
- Send 7 days Notice to all the directors for holding a board meeting. Special notice to directors informing about the removal of the director.
- In the Board meeting pass a resolution for holding an Extra Ordinary Board Meeting. Along with that pass a resolution for the removal of the director subject to the approval of shareholders.
- EGM shall take place by giving 21 days clear notice. In EGM if the majority of members are in favor of the decision, the resolution will be passed.
- However, before passing the resolution, an opportunity of being heard will be given to the director.
- After the resolution, the director shall file Form DIR-11 and the company shall file Form DIR-12 with MCA.
- After filling all the forms, the name of the director will be removed from the master data of the Company on the Ministry of Corporate Affairs website.
Director does not attend Board Meetings for 12 months
As per section 167 of the Companies Act, 2013 a Director shall vacate the office if he does not attend Board Meetings for a continuous period of 12 months. Further the period of 12 months begins the first board meeting in which he was absent. As a result of vacation Form DIR – 12 will b filed on his name. After which his name will b removed from the Ministry of Corporate Affairs.
FAQs
No, a body corporate cannot be appointed as a director in a company. Only an individual can be appointed as a director in the company.
Yes, there is eligibility criteria for adding new director and it is as follows:
– The proposed individual must be a major.
– He or she must qualify as per the laws mentioned under the Companies Act, 2013.
– The Members of the Board must give consent to the appointment of the individual.
– However the Companies Act does not mention any educational qualification in order to be eligible to become a Director.
Hey @emmy
e-Form DIR-12 must be accompanied with a certified true copy of board resolution. In case of appointment, DIR-2 must be attached and in case of resignation, the resignation letter must be attached.
You can learn about Addition/ Removal of Directors here:
Hope this helps
Hey @suthar_gunjan
DIR-12 is an STP (Straight Through Processing) form, hence it gets approved as soon as the payment is made and marked as “Paid” by MCA.
Hope this helps!