Overview

Change in director in a company is a significant event that can have a impact on the organization as a whole. The director plays a crucial role in setting the strategic direction of the company, making key decisions, and ensuring that the company achieves its goals. When there is a change in director, it can bring shift in the company's vision, goals, and priorities. This can lead to changes in the company's operations, culture, and overall direction.

The change in director can also have an impact on the company's reputation and image in the eyes of investors, customers, and the public. A new director may bring fresh ideas, perspectives, and leadership style to the company, which can potentially attract new investors, customers, and partners. Therefore, it is crucial for the company to manage the transition effectively, provide clear communication, and demonstrate strong leadership in order to ensure that the change in director is a positive and successful event for the company.

Change of director in the company is possible at any time and it can be in the following scenarios:-

1.  Appointment of a New Director or 
2.  Voluntary Resignation by the Director or 
3.  Removal of a director or 
4.  Vacation of Office of Director due to disqualification. 

It is an event-based compliance in any company and it must be intimated to the Registrar of Companies (ROC) within 30 days of passing a resolution in the Board Meeting/Annual General Meeting/ Extra-ordinary General Meeting. In case you require expert guidance, feel free to contact us.

Appointment of Director

1)  Apply for DIN:-  At First, we have to apply for DIN. No person shall be appointed as director of a company unless he/she has been allotted the Director Identification Number

2)  Hold a Board Meeting:- It is vital to conduct a board meeting for the appointment of a Director as consent of board members is mandatory to move ahead.

3)  Hold Extra-Ordinary General Meeting: - The consent of Shareholders is required by passing an Ordinary Resolution for the appointment of a Director.

4)  Filing Form DIR-12:- Form DIR-12 is required to be filed with ROC within 30 days of the appointment of a director in the company. 
 

Documents Required for Change in Directors 

In order to change the directors, you need various documents, which are as follows:-

•  Latest passport-size photo

•  DSC and DIN

•  PAN card

•  Identity proof and residence proof

•  Other personal details such as mail ID, phone number, etc.
 

Resignation of Director

A director may resign from his/her office by giving a notice in writing to the company. 

1. The Board shall on receipt of such notice:

• Take note of the same and the company shall intimate the Registrar in form DIR -12 within 30 days from the date of resignation.
• Place the fact of such resignation in the report of Directors laid in the immediately following general meeting by the company.

The director may also forward a copy of his resignation along with detailed reasons for the resignation to the Registrar within thirty days of resignation in Form DIR-11.

The effective date of resignation will take effect from: 

• The date on which the notice is received by the company. 
• The date specified by the director in the notice. 

Whichever is later.

Removal of Director

A company may, by ordinary resolution, remove a director, not being a director appointed by the Tribunal, before the expiry of the period of his office after giving him a reasonable opportunity of being heard:

1. A special notice shall be sent to the company for the removal of the director at least 14 days before the general meeting. 

2. The company shall send a copy of special notice to the director concerned. 

3. The director concerned shall have a right to make a written representation against his removal. 

4. The company shall give notice of the resolution for the removal of the director to all the necessary persons at least 7 days prior to the general meeting along with- 

• A copy of the written representation 
• Fact of written representation made by the director 

5. Where circulation of written representation is not possible, the director may require it to be read out at the meeting. 

6. The company shall file the e-form DIR-12 with the registrar within 30 days from the date of passing the resolution.

A vacancy created by the removal of a director under this section may be filled by the appointment of another director in his place at the meeting at which he is removed.  A director so appointed shall hold office till the date up to which his predecessor would have held office if he had not been removed.
 

Disqualifications of Directors

The director of a company loses his directorship in the company on the following grounds:

1. He absents himself from all the meetings of the Board of Directors held during a period of twelve months with or without seeking leave of absence of the Board.

2. He acts in contravention of the provisions of section 184 relating to entering into contracts or arrangements in which he is directly or indirectly interested.

3. He fails to disclose his interest in any contract or arrangement in which he is directly or indirectly interested.

4. He becomes disqualified by an order of a court or the Tribunal.

5. He is convicted by a court of any offense, whether involving moral turpitude or otherwise and sentenced in respect thereof to imprisonment for not less than six months.

6. He having been appointed a director by virtue of his holding any office or other employment in the holding, subsidiary or associate company, ceases to hold such office or other employment in that company.