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Addition / Removal Of Director

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Addition / Removal Of Director

It is possible to add or remove a director from the company at any time. While the articles of incorporation should have provisions allowing it, the Articles of Association and Companies Act provisions dictate how and who can be appointed as a new director. Adding new directors &Removing a director to the company involves following a bunch of procedures and OnlineFiling is here to help you make the whole process easy for you.

Process of Adding a Director

The process of adding a director is more complicated than one might think it to be.

  • Step 1: Check if the articles (AOA) of the company supports adding an additional director. If there are no such provisions in the AOA of the company, then modify the AOA of the company in a way that allows adding an additional company director.
  • Step 2: The proposed director must give his or her consent to act as the director via Form DIR-2.
  • Step 3: The company must pass a board resolution for appointing a particular person as a director of the company.
  • Step 4: Get DSC (digital signature certificate) and DIN (director identification number) for the new director.
  • Step 5: Collect the basic documents and information required for the process and get Form DIR-2, Form DIR-12 and Form DIR-8 at ROC done.

Documents required

  • Passport
  • PAN card
  • Proof of residence (electricity bill, rental agreement, Aadhar Card, voter ID, passport, driving license)
  • Passport size photograph
  • Digital signature certificate of the proposed director
  • PAN card: mandatory for an Indian applicant
  • Passport: mandatory for a foreign applicant.

Why OnlineFiling

Here is why you should choose OnlineFiling for adding or removing a director from your company:

  • You will get the best support
  • Simple and speedy process
  • Experts will guide you through the whole process
  • A resolution drafted and forms filled & filed for you
  • All your queries will be answered.

Process of Remove a Director

There are 3 ways to remove a director from a company:

1. When the Directors Tender Their Resignation
  • Step 1: Holding a board meeting by giving seven days of clear notice
  • Step 2: In the meeting, the board members will take note of the resignation
  • Step 3: Then they have to pass a resolution in a particular format to that effect
  • Step 4: After that, Form DIR-11 needs to be filed by the resigning director in his individual capacity
  • Step 5: The company has to file Form DIR-12 with the registrar of companies (ROC) along with the registration letter and the board resolution
  • Step 6: When all the forms are filled and the formalities for the removal of the director are done, the name of the director will be removed from the master data of the company on the Ministry of Corporate Affairs (MCA) website.

2. Director Remains Absent from the Board Meetings for 12 Months
  • Step 1: If a director absents himself from all the meetings of the board of directors held over a period of twelve months, with or without seeking leave of absence from the board, they are considered to have vacated their office as per Section 167
  • Step 2: A Form (DIR-12) must be filed
  • Step 3: Upon completion of the formalities, the concerned director’s name will be removed from the database of the Ministry of Corporate Affairs (MCA).

3. Removal of Director by Shareholders
  • Step 1: A notice is sent to all the shareholders for a board meeting required to be conducted within seven days from the date of the issue
  • Step 2: A resolution is passed to have a general meeting and then for the removal of the director, subject to the approval of the shareholders on the day of the meeting
  • Step 3: After providing a 21-day notice, the second meeting of shareholders is held to vote on the resolution passed earlier and the director who is being removed by the shareholders will be allowed to speak on their removal
  • Step 4: The shareholders must file Form DIR-12, along with the attachments of the board resolution, and an ordinary resolution
  • Step 5: Once all the formalities are over, the name of the concerned director is removed from the database of the Ministry of Corporate Affairs (MCA) and its website.

Consequences of Not Filing Form DIR-12:

DIR-12 has to be filed within 30 days from the date of resignation. If the company fails to do so, the following penalties will apply:

  • After 30 days - within 60 days: twice the government fees
  • After 60 days - within 90 days: 4 times the government fees
  • If it exceeds 90 days: 10 times the government fees
  • If it exceeds 180 days: 12 times the government fees and will be booked for the compounding offence as well
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