Appointment or Resignation of Director
Preparation of necessary documents and completing compliances as per Secretarial standards
Attaining new DIN through DIR 3 form
Filing of DIR-11/DIR-12 Form with MCA
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Introduction - Appointment or Resignation of Director
Directors play a crucial role in the efficient operation of a company, and their appointment and resignation must comply with the provisions of the Companies Act, 2013 and the Companies (Appointment and Qualification of Directors) Rules, 2014.
Here's a guide to understanding the pROCedure for appointment and resignation of directors and the compliance requirements involved.
Appointment of a Director
- Send a notice to all directors at least 7 days before the meeting, stating the agenda.
- Pass a Board Resolution to call for a General Meeting (GM) where the appointment will be made.
- Notify shareholders about the meeting, including the agenda, date, time, and place.
- Issue notice to directors, shareholders, and auditors at least 21 days before the GM. A shorter notice is allowed with the consent of 95% of voting members.
- Obtain consent through writing or electronic mode.
- Pass a resolution for the appointment, subject to shareholders’ approval.
- Submit Form DIR-12 to the Registrar of Companies (ROC) within 30 days of the appointment.
Prerequisites for becoming a Director:
- Director Identification Number (DIN)
- Digital Signature Certificate (DSC)
List of Documents Required
KYC Documents of new Director
Digital Signature Certificate (DSC) of existing and new director.
Certificate of Incorporation
Resolutions (Formats will be provided)
Appointment/Resignation letters( Formats will be provided)
Details of resigning director ( if any)
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Final Quote And Payment
Filing of Forms With ROC (1 Day)
Issuance of Revised MOA (7 Days)
Resignation of a Director
- The director must provide a written notice to the company, stating the reasons for resignation.
- The Board of Directors must present the notice in a General Meeting to inform shareholders.
- The director’s resignation must be mentioned in the directors’ report presented at the GM.
Filing with ROC:
- Submit Form DIR-12 to the ROC within 30 days from the resignation date.
- The effective date of resignation is the latest of the date the notice is received or the specified date in the notice.
- The director must also file Form DIR-11, along with prescribed fees, reasons for resignation, and a copy of the notice, to the ROC within 30 days of resignation.
Removal of a Director
Notice of Resolution:
- Issue a notice of the resolution for removal to all necessary parties at least 7 days before the meeting.
- If delivery of the notice is not possible, publish it in newspapers and post it on the company’s website.
- Provide a copy of the notice to the concerned director, who has the right to be heard at the GM.
- The director may submit a written representation against their removal, requesting it to be circulated to all members.
- If circulation is not possible, the director may request the representation to be read at the meeting.
Filing with ROC:
- File Form DIR-12 with the ROC within 30 days of the director’s removal, along with the prescribed fees and necessary attachments.
- Includes details of the company, number of directors, date of appointment or cessation, and respective DINs and DSCs.
- Attachments may include the director’s declaration for appointment or evidence of resignation/cessation.
- Filed to give notice of director’s resignation to the ROC.
- Includes details of the company, DIN of the resigning director, date of resignation, reasons, and attachments such as the notice of resignation and proof of dispatch.
Compliance with the Companies Act and timely filing of relevant forms are essential to maintain legal conformity during the appointment and resignation of directors. For comprehensive compliance support, consult our services to ensure smooth operations and adherence to regulatory requirements.
Frequently asked questions
Yes, a director can be appointed and resigned on the same day.
Appointment of Director means designating an individual to serve as a member of a company’s board of directors.
ROC fees and charges for filing resignation of director depends upon the nominal share capital of the company and is mentioned below:
If nominal capital is less than INR 1,00,000 then INR 200
If nominal capital is between INR 1,00,000 to INR 4,99,999 then INR 300
If nominal capital is between INR 5,00,000 to INR 24,99,999 then INR 400
If nominal capital is between INR 25,00,000 to INR 99,99,999 then INR 500
If nominal capital is between INR 1,00,00,000 or more then INR 500
The above cost is only ROC fees and does not include any professional fees.
A proper notice of resignation in writing by the director resigning from the office should be served and Form DIR-12 should be filed for valid resignation and intimation to the Registrar of Companies (ROC).
The procedure of resignation of managing director is same as the resignation of any other director. Firstly, the managing director should serve proper notice of resignation in writing and then Form DIR-12 should be filed to intimate the resignation to the Registrar of Companies (ROC).
Yes, a director can resign at any time after his appointment.
Yes, the director who has resigned shall be liable even after his resignation for the offences which occurred during his tenure.
The formalities for resignation of director includes serving of proper notice of resignation in writing by the director resigning from the office and filing of Form DIR-12 for intimation to the Registrar of Companies (ROC) about the resignation.
Director’s Resignation Letter and Evidence of Cessation (Resignation acceptance letter or Board resolution) are required for Director’s resignation.
However, the director who has resigned shall be liable even after his resignation for the offences which occurred during his tenure.
Yes, for a director to resign, no approval is required from the company. However, the resignation of director shall be filed in Form DIR-12 to intimate the Registrar of Companies.
There is no time prescribed in the Companies Act for the notice period by the director. However, a director may have to abide by the terms and conditions as mentioned in the appointment letter issued by the company.
Form DIR-12 is to be filed for resignation of director from a Company.
- For appointing a new director, the person should have valid DIN and also a consent to act as Director in Form DIR-2 and Interest in any other entities in Form MBP-1 shall be obtained from the person to be appointed.
There is no timeline prescribed for the notice period for a director’s resignation as per the Companies Act, 2013. However, the director’s resignation should be formally communicated to the company’s board of directors, shareholders, and relevant authorities as required by law.
Yes, a director can resign anytime subject to the terms and conditions in the appointment letter.
The consent to act as a director in Form DIR-2, appointment letter, Board or Shareholder’s resolution for appointment and Identity proof of the person is mandatorily required for the appointment of a director.
Yes, Director Identification Number (DIN) is mandatory for the appointment of a person as Director in the company.
Appointment letter and filing of Form DIR-12 is the proof of appointment of new directors.
Any previous Director or any authorized signatory of the company can sign Form DIR-12 for appointment of director.
The director resigning from the Board can sign by themself the Form DIR-11. In case, resignation is being filed by the company in Form DIR-12 then any previous Director or any authorized signatory of the company can sign.
There are several types of appointments of directors which include following:
Executive Directors: Executive directors are appointed for their executive roles and responsibilities within the company. They often have specific areas of expertise, such as finance, operations, or marketing, and are actively involved in the company’s operations.
Non-Executive Directors: Non-executive directors are appointed based on their knowledge, expertise, and experience in a particular field or industry. They provide independent oversight, strategic guidance, and contribute to the company’s governance.
Alternate Directors: In some cases, a director may appoint an alternate director to act on their behalf when they are unable to attend board meetings or fulfill their duties. The appointment of alternate directors is subject to the company’s articles of association or the director’s agreement with the company.
Nominee Directors: Nominee directors are appointed by a specific shareholder or group of shareholders to represent their interests on the board. They may be appointed by venture capitalists, private equity firms, or other entities that have invested in the company.
Additional Directors: Additional directors may be appointed during the course of the company’s operations to meet the evolving needs of the business. These appointments may be temporary or permanent and can be made to address specific expertise or diversity requirements.