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Any changing in the Board of Directors (BD) of a company should better be made as per the provisions given in the Companies Act of 2013, the AOA of the company, and also as per the agreed service agreement, if any. Again, the need for changing director in a company must be duly justified and approved by the shareholders of the company. Here it may be noted that making a change in director means either removing a director from the BD or appointing a new director to the BD as an additional director. The section below deals separately with the procedure for change in directors of a private or public limited company in India.
Noteworthy here are the facts that as per the new Indian Companies Act of 2013, a private limited company and an LLP company must have at least two directors always. On the other hand, a public limited company must have a minimum of three directors at all times. In the general cases, a company could have a maximum of 15 directors. Again, a foreign national can also become a director in any of these types of companies in India, provided he/she meets the requirements prescribed for becoming a company director. For making appointment of a new director concerned is the Section 160 of the Indian Companies Act of 2013, while the Section 168 is relevant for getting resignation/removal of a director from the BD of a company.
Procedure for Change in Directors - How to Change Company Director
In general, the processes involved in the whole procedure for change in directors in a private limited or a public limited company, are the following:
The appointment of a new director should be first approved in the Annual General Meeting and the Board of Directors of the company, stating and justifying the grave need of appointing a new director. The passed resolution in this connection should be informed to the proposed director as earlier as possible. Again, the new director shall give a written consent for acting as a director in the company in Form DIR-2.
In case of resignation from the Board of Directors, the resigning director has to give a notice to the BD, and the company is required to conduct a Board meeting and then a General meeting to inform about the said resignation and approve the same through taking a resolution by a simple majority. The resigning director also needs to submit a copy of the specified resignation to the concerned ROC in Form DIR-11, within 30 days.
In either of the cases of resignation or appointment, the related company is required to submit a copy of the resolution taken in Board meeting or General meeting of shareholders, along with the Form DIR-12 to the concerned ROC, within 30 days from the effect of the resolution.
Lastly, the related company needs to make necessary entries in its Register of Directors, maintained in accordance with the provisions of the Section 170 of the new Indian Companies Act of 2013.
