Procedure for Appointment of New Director
Sequential Steps for Adding a Director to the Company Board
Steps in Sequence for Director Appointment
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1
Obtain Consent: Obtain the formal consent (DIR-2) of the proposed Director to act in that capacity.
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2
Digital Signature: Obtain the Digital Signature Certificate (DSC) (Class-3) of the proposed Director, if they don't already have one.
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3
Director Identification Number (DIN): Obtain the DIN of the proposed Director from the Ministry of Corporate Affairs (MCA).
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4
Issue Notice: Issue the Notice of General Meeting (or Board Meeting, as applicable) that includes the agenda for adding the new Director.
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5
Hold Meeting: Hold the Extra Ordinary General Meeting (EGM) or Board Meeting to pass the necessary resolution for the appointment.
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6
Appointment Letter: Issue the formal Letter of Appointment to the Director who has been added to the company.
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7
File DIR-12: File Form DIR-12 with the Registrar of Companies (ROC) within the prescribed time limit, attaching all necessary documents.
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Basic Plan
- Add a Director having DSC and DIN to the Board of Directors.
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Standard Plan
- Add a Director having DSC to the Board of Directors. Fees inclusive of one DIN application.
- Dsc charges are not included in package.
Premium Plan
- Add a Director to the Board of Directors. Fees inclusive of one DSC and one DIN.
- Dsc charges are included in package.
FAQ's on Appointment Of New Director
Your Questions Answered
What are the mandatory prerequisites for a person to be appointed as a Director?
The proposed director must possess a valid Director Identification Number (DIN) and a Digital Signature Certificate (DSC). They must also provide their written Consent (Form DIR-2) to act as a director and a declaration of non-disqualification (Form DIR-8).
What document must be checked before initiating the appointment process?
The company's Articles of Association (AoA) must be checked. The AoA should specifically contain a clause empowering the Board of Directors or the shareholders to appoint new directors. If not, the AoA must be amended first.
What is the primary method for appointing a Regular Director?
A Regular Director must be appointed by the company's shareholders by passing an Ordinary Resolution at a duly convened General Meeting (Annual General Meeting (AGM) or Extraordinary General Meeting (EGM)).
Can the Board of Directors appoint a director without shareholder approval?
Yes, the Board can appoint directors for certain specific categories, such as: 1) Additional Director (who holds office only until the next AGM) and 2) Director to fill a Casual Vacancy (caused by the death or resignation of a director appointed by shareholders).
Which e-form is mandatory to be filed with the ROC upon appointment of a Director?
The company must file e-Form DIR-12 (Particulars of appointment of Directors) with the Registrar of Companies (ROC) via the MCA portal. This form notifies the ROC of the change in the board composition.
What is the timeline/due date for filing Form DIR-12 after the appointment?
Form DIR-12 must be filed with the ROC within 30 days from the date of the appointment resolution (Board or General Meeting, as applicable). Failure to file within 30 days attracts substantial late fees/penalties.
Is there any other resolution-related form required to be filed with the ROC?
Yes. If the appointment of a Regular Director requires a **Special Resolution** (which is mandatory for some types of appointments or remuneration) or an Ordinary Resolution in an EGM, the company must also file **e-Form MGT-14** (Filing of Resolutions) with the ROC within 30 days of passing the resolution.
What is the consequence of not filing the appointment forms (DIR-12) on time?
Late filing leads to the imposition of heavy **additional fees** (penalties) based on the period of delay. Furthermore, prolonged non-compliance can result in the deactivation of the Director's DIN and potential **disqualification** of the company's directors.
