Appointment and Resignation of Director
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Overview of Appointment and Resignation of Director
Updated on December 31, 2022 04:39:28 PM
It is often said that directors are the brains of a company. They are the managerial staff who control and administer the company’s operations. Changes in the board of directors occur one way or another – either by appointing new directors or accepting the resignation of existing ones. The aim of these changes is to ensure an optimal mix of expertise on the board for the benefit of the company.
The authority to approve the resignation of a director lies with the Board of Directors, while the appointment must be approved by the shareholders. Whether it is an appointment, removal, or resignation, the change does not take effect immediately; intimation must be made to the Ministry of Corporate Affairs.
What is the Eligibility Criteria to be a Director?
To be eligible to serve as a director, an individual should meet the following criteria:
Age: The person should be competent to enter into any contract. For certain types of directors (e.g., managing director, full-time director, or independent director of a listed company), the minimum age is 21 years, and the individual should not have reached the age of 70 years officially.
Nationality: While there is no restriction on nationality, at least one director must be Indian.
Director Identification Number (DIN): The individual must obtain a Director Identification Number. The purpose of the DIN is to prevent fraudulent activities by ensuring that directors can be identified through this unique number.
Limit of Directorship: An individual can be a director of up to 20 separate companies at a time, out of which only ten can be public companies
Ineligibility
Persons of Unsound Mind or Bankruptcy
Individuals who are of unsound mind or incapable of making decisions independently cannot be appointed as directors. This includes minors, mentally disabled individuals, and individuals with unstable mental faculties. Additionally, individuals who are insolvent or have filed for bankruptcy in a court of law are disqualified from serving as directors.
Criminal Background
Individuals with a criminal record who have been sentenced to imprisonment for seven years or more are ineligible to be directors.
Failure to File Overdue Returns
Individuals who have failed to file previous returns in any of the preceding years are prohibited from holding a directorial position.
Documents needed for Appointment and Resignation of Director
Photograph: Passport size photo of the Director to be designated
PAN Card: Self-attested PAN card of the Director to be designated
Proof of Residency: Aadhar Card/ Voter ID/ Passport/ Driving License director to be appointed
Digital Signature Certificate: DSC of the ongoing Director and Director to be eliminated/removed
Identity proof before-mentioned as Passport/Election card/Driving License/Aadhar card
Mobile number and Personal & official email id of the Director
It is mandatory to apostille all the documents apostilled if the Director is a non-resident of India.
Notice of resignation filed with the company
Proof of dispatch
Acknowledgment of form, if received.
What are the gateways for the criteria to add a new Director?
Why Taxvilla
They are:
The intended individual must be a major.
He or she needs to qualify as per the laws mentioned under the Companies Act, 2013.
The Members of the Board must agree to the appointment of the proposed person.
Companies Act does not consider any educational qualification to be trained to become a Director.
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