The process of appointing or adding a director involves several key steps to ensure compliance with the Companies Act, 2013:
Step 1: Reviewing the Articles of Association (AOA)
Begin by examining the company’s AOA to confirm whether it permits the appointment or addition of directors. If such a provision is absent, the AOA must be amended accordingly.
Step 2: Passing a Resolution at a General Meeting
- Annual General Meeting (AGM): Directors are typically appointed during the AGM.
- Extraordinary General Meeting (EGM): If an appointment is required outside the AGM, an EGM must be convened. The board first passes a resolution to call an EGM, where another resolution is passed to approve the appointment. This resolution must be filed with the Registrar of Companies (ROC) using Form MGT-14 within 30 days.
Step 3: Application for DIN and DSC
The individual nominated for directorship must obtain a Digital Signature Certificate (DSC) and a Director Identification Number (DIN) if they do not already have them. They must also submit a declaration stating they are not disqualified under the Companies Act, 2013.
Step 4: Obtaining Director’s Consent (Form DIR-2)
The proposed director must provide formal consent for their appointment using Form DIR-2, confirming their acceptance of the role and responsibilities.
Step 5: Issuing the Letter of Appointment
Once all regulatory requirements are met, the company issues a Letter of Appointment, detailing the director’s responsibilities, role, and terms of engagement.
Step 6: Filing with the Registrar of Companies (ROC)
After the director’s appointment, the company must submit:
- Form DIR-2 (Director’s consent)
- Form DIR-12 (Appointment details)
These must be filed with the ROC within 30 days to ensure compliance.
Step 7: Updating the Register of Directors
The company must update its Register of Directors and Key Managerial Personnel to maintain accurate records of board members.
Step 8: Updating Regulatory and Tax Records
Finally, the director’s details should be updated with the GST Network and relevant tax authorities to ensure compliance with tax regulations.
Each of these steps must be executed with precision and in accordance with the Companies Act, 2013 to ensure the director’s appointment is legally valid and fully compliant.
