Add/Remove Director

Add/Remove Directorp

What is Add/Remove Director ?

Directors are the said to be brain of the company. They are the managerial personnel who control and administer the company’s operations. The rotation of directors takes place in one or the other way – either by appointment of new director or resignation of existing. Aim to carry out change of directors is always to ensure optimum combination of experts on board for interest of company. The authority to approve the resignation of the director lies with the members of BoD whereas the appointment must be made through consent of shareholders. Whether it is an appointment, removal or resignation, the change does not take effect until the intimation is made to Ministry of corporate affairs.

Documents Required


  • Photograph
  • PAN Card
  • Proof of Residence
  • Digital Signature
    Certificate
  • Why changing Directors Required?

    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.

    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.

    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.

    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.

    FAQ's

    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.

    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.

    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.

    In order to remove a director from a Company, the directors shall conduct a meeting of members for their consent after serving special notice in this regard. The exiting director must be given an opportunity to represent his grounds.