Add or Remove a Director (Company)

Get finest directors on board with change of directors. They are the managerial personnel who control and administer the company’s operations

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Why changing directors is required?

Hire new talent on board

With the growth of business, strategies and alliances are developed, that requires inputs of each department are required for effective planning. Also, with an addition of the new product line or department, an expert to lead the team can be hired in a managerial position being director of the company. This benefits the company with specialization and focused efforts.

Assign operational responsibility without dilution ownership

Directors are responsible for day-to-day operations. With the appointment of an additional director, the shareholders can assign the operational responsibilities to directors keeping strategic control in hand. Here, a director does not require subscribing to share capital, hence, the ownership and voting rights of shareholders does not dilute with a new person on Board.

Inability to work by existing directors

The existing directors may be unable to serve the company after a certain period due to retirement or other personal reasons. Whether it is a resignation by the director or his death, the company needs to make sure that its work is unaffected. It needs to process for both discontinuations by director and appointment of a new director if any.

Number of directors fall under statutory limit

The Companies Act has prescribed the minimum number of directors in any company, which is 2 and 3 for Private and Public company respectively. At any time during the company’s existence, the number of directors shall not reduce below from the limit. The company must appoint a new director(s) within 6 months if the number reduces below 2/3.

Know about directors’ change in a company

The company’s directors are thought to be its brains. They are the managerial staff members in charge of running and managing the business. The hiring of a new director or the resignation of an existing director are the two ways that the board of directors rotates its directors. A change of directors is always intended to bring on the best possible team of specialists for the benefit of the firm.

The Board of Directors members have the power to approve a director’s departure, but shareholders’ approval is required for appointing a new director. Regardless of whether it is an appointment, removal, or resignation, the change is not finalized until the Ministry of Corporate Affairs is notified.

Documents Required

List of Documents that are required to proceed with this service package are

PAN Card

Self-attested PAN card of the director to be appointed

Proof of Residence

Aadhar Card/ Voter ID/ Passport/ Driving License director to be appointed

Digital Signature Certificate

DSC of the continuing director and director to be removedDSC of the continuing director and director to be removed

Photograph

Passport size photograph of the director to be appointed

Frequently Asked Questions

What should I know before changing directors in Private Limited Company?

While carrying change in the board of directors, the company must obtain consent from its Board and members, as required by passing a resolution. Further, the care must be taken that the number of directors does not fall below the statutory limit after removal or resignation.

What should I do if number of director(s) in my company is less than 2/3?

If the total number of directors is less than the number prescribed, the company shall appoint a director(s) in the company to fulfill the requirement within 6 months from removal/resignation/death of the concerned director.

Can I resign myself from the company?

Yes, a director can voluntarily resign. The notice of resignation must be served to company stating reason of resignation. Also, the resigning director needs to file a form for intimation to MCA about his resignation from company.

What are the pre-requisites to add a director in company?

An individual to be added as a director must be major and qualified under the Companies Act, 2013. For the appointment, the consent of the members is also required.

Do I need to apply for another DIN, if I have already procured one?

No, you are not required to obtain another DIN. It is permanently allotted and can be used for a person’s subsequent appointment in any company/LLP.

There is no requirement to subscribe the shares by the director. However, if the Articles (AoA) of the company prescribe for any such subscription, it must be fulfilled as a condition for his appointment.

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Add or Remove a Director (Company)