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Who is a Director in a Company?
Who is a Director in a Company?
A director is a pivotal individual appointed by a company's shareholders to guide and manage the company's operations. They act as the company's representatives, ensuring its actions comply with the rules outlined in its legal documents. In essence, directors are the human face of a company, responsible for its day-to-day activities and strategic decisions.
In a Private Limited Company, directors play an especially critical role. They are the driving force behind the company's decisions and are accountable to the shareholders for the company's performance. Shareholders entrust directors with managing their investments effectively, and the directors' appointment often reflects the shareholders' priorities and needs.
Key Sections of the Companies Act, 2013
Key Sections of the Companies Act, 2013
Section 149: This section sets the rules for the composition of a company's Board of Directors. It specifies the minimum and maximum number of directors, requires at least one female director, and mandates a resident director.
Section 152: This section outlines the process for appointing directors. It generally involves a company's general meeting and emphasizes the importance of a Director Identification Number (DIN).
Section 161: This section covers the appointment of additional, temporary, or representative directors by the company's Board.
Section 164: This section lists the qualifications that disqualify someone from becoming a director.
Section 169: This section covers provisions regarding removal of a Director from Company.
Eligibility Criteria for a Director Appointment
Eligibility Criteria for a Director Appointment
To be appointed as a director in a company, an individual must meet the following criteria:
Age: They must be over 18 years old.
Legal Eligibility: They must comply with the requirements of the Companies Act, 2013.
Board Approval: The existing board members must consent to their appointment.
Article Compliance: Their appointment must align with the relevant provisions in the company's Articles of Association.
Note that the Companies Act does not specify any educational qualifications for directors. Additionally, Indian citizens, non-resident Indians, and foreign nationals can all be appointed as directors in India.
Documents required
Documents required
Photograph
Self-attested copy of PAN (mandatory for Indian applicant only)
Self-attested copy of identity and address proof
Consent to act as director in format of DIR-2
Copy of resolution passed by the shareholders
Notice for shareholders meeting
Apostilled/Notarised copy of Passport (in case of Non-Resident or Foreign Individual)
Process for Change in Directors as per the Companies Act, 2013
Process for Change in Directors as per the Companies Act, 2013
DIN application: Every individual, who is to be appointed as a director shall make an application electronically in e-form DIR-3 for the allotment of DIN.
Consent of the New Director: The new director must provide his written consent to join the company as a director.
Board Resolution: The existing directors must pass a resolution approving the appointment of the new director.
Form DIR-12: The company must file Form DIR-12 with the Registrar of Companies (ROC) within 30 days of the appointment.
Form DIR-11: Where a director resigns from his office, he shall within a period of thirty days from the date of resignation, forward to the registrar a copy of his resignation along with the reason of resignation in e-form DIR-11.
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