Appointment Of A Director In A Private Limited Company | Ebizfiling

 


Introduction

 

Since the company is a legal entity, it requires a natural person to manage, lead, control, and supervise the affairs of the company.  There must be a minimum of two directors appointed for a Private Limited Company in India. The board of directors of a Private Limited Company can elect or nominate one or more people to serve as a director who executes and determines the policies of the company. In this article, we have discussed the process of appointment of a Director in a Private Limited Company.

 

Who is a Director?

 

A director is a person who is appointed to manage or control the affairs of the company. They are responsible for monitoring the progress of the company, and giving direction to the employees. The director of a Private Limited Company acts as a representative of the company in any case.

 

Eligibility of Director

 

  • The appointment of the Director of the company is governed by the clauses of the Article of Association (AoA) of the company.

  • The person appointed as a Director must have attained majority i.e., he must be above the age of 18 years.

  • The person is qualified as per the provisions mentioned under the Companies Act, 2013.

  • The director can be an Indian National, Non-Resident Indian (NRI), and Foreign National.

  • It is mandatory to get the consent of the Members of the Board for the appointment of the proposed individual as a director.

  • The Companies Act, 2013 does not mention any requirement of educational qualification in order to be eligible to become a Director.

 

Documents Required for the Appointment of Director in a Private Limited Company  

 

  • Self-attested copy of PAN

  • Self-attested copy of identity and address proof (passport, Aadhar card, or Election card)

  • Consent to act as director in form DIR-2

  • Copy of resolution passed by the shareholders

  • Notice for shareholders meeting

  • PAN card: Mandatory for an Indian Applicant

  • Passport: Mandatory for a foreign Applicant

 

Process for the appointment of director in a Company

 

Get the consent of the Director in Form DIR-2

 

The first step is to obtain the consent of the proposed Director while appointing a Director in a company. The consent of the proposed director to act as a Director by an individual in the company should be filed in Form DIR 2 with all the required documents.

 

Get the DSC and DIN of the proposed Director

 

The next step is to obtain the Digital Signature Certificate (DSC) and DIN of the proposed Director of the Company. If he does not have DSC then he must get it from certifying authorities of India.

 

If the Director does not have DIN also, the first thing is that he needs to inform the company about the same. Then the company must pass a resolution for the same and apply for the DIN of the proposed Director in Form DIR-3. The Private Limited Company must file DIR-3 KYC with all the required documents. The DIN allotted will be valid only for the lifetime of the Director.

 

Call for a board meeting and EGM

 

The Director of the company should be appointed at the general meeting of the company. In this respect, the company must send a notice to all the shareholders about holding an Extra Ordinary General Meeting of the company.

 

Once the notice about calling an EGM is sent to the shareholders, the next step will be to hold the meeting at the decided time and date. In the meeting pass all the required resolutions for the appointment of the Director in the company

 

Letter of appointment to the Director

 

After passing the resolution, the next step will be to issue a letter of appointment to the Director of the company. The Appointment letter must include the terms and conditions of the appointment of the Director along with the salary to be payable to him.

 

Fill Form DIR-12 with ROC

 

When all the necessary steps are completed, the company must file DIR-12 with the Registrar of Companies within 30 days from the date of appointment of the Director along with all the necessary documents.

 

Conclusion

 

We will conclude by saying that once the appointment of the Director is completed, the company should make necessary changes and entries in the Registrar of the Director of the company and key managerial personnel. Also, make changes in the register of contracts and arrangements in which Directors are interested. One more interesting fact is that the appointment of a director in different types of the Private Limited Companies such as a private company limited by shares, limited by guarantee, and unlimited company is the same as above.

 

 

 

 

 

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