The Articles of Association (hereinafter called “AOA”) of Company allows the Board of Directors the power to appoint any person as an Additional Director at any time who shall hold office up to the date of the next Annual General Meeting or the last date on which the Annual General Meeting should have been held, whichever is earlier. [Section 161(1)]
- The Director to be appointed by Board of Directors is not such a person who has failed to get appointed as a Director in a General Meeting. [Section 161(1)].
- Board of Directors shall be authorized by AOA of the company to appoint an Additional Director. [Section 161(1)].
- Total number of Directors in the Company shall not exceed the limit after appointing of an Additional Director section 149(1).
- The individual who will be appointed as an Additional Director shall hold Active DIN. (Section 152(3)).
Following Procedure is to be followed
- Check the AOA of the Company
Refer the AOA, if not authorized by the AOA then it needs to be altered for the appointment of the Additional Director. [Refer Procedure for Alteration of Articles]
- Obtain Written Consent and Declaration from the Proposed Additional Director
The Proposed Additional Director has to submit Form DIR-2 (Consent to act as a Director) and Form DIR-8 (Intimation by Director about his disqualification) to the Company. Such person shall also give a declaration that he fulfills the conditions for appointment as a Director.
- Obtain Form MBP-1 from the Proposed Additional Director
Company shall obtain a disclosure of interest in Form MBP-1 from the person who is proposed to be appointed as an Additional Director.
- Obtaining DIN and Digital Signature Certificate [Section 153]
- If the person does not have Digital Signature, he shall obtain Digital Signature from Certifying Authority in India.
- The person shall have a valid DIN allotted by the Ministry of Corporate Affairs. At present, application for allotment of DIN can be submitted to MCA only through the company where he/she is proposed to be appointed.
- The Application for DIN is required to be countersigned by a Director of the Company and a copy of resolution approving the proposal of appointment is also to be submitted by the person in Form DIR-3 with MCA with his ID Proof & Address proof, duly digitally signed by him and a director of the company in which the appointee is intended to be appointed as director.
- Documents for DIR-3 are as follows
- One Passport Size Photo in JPG/JPEG Format
- Board Resolution proposing his appointment as director in an existing company
- Specimen signature duly verified
- ID Proof- Driving License/Passport/Election Voter ID Card
- Residence Proof- Utility Bill (Electricity Bill/Telephone Bill)/Bank Statement/Mobile Bill
- Other Mandatory Attachments- Income Tax PAN (For Indian National), Passport (For Foreign Nationals)
- Other Attachments- Aadhaar Card.
- Meeting of Nomination and Remuneration Committee
Where a Company is required to constitute a Nomination and Remuneration Committee under section 178, shall receive a recommendation from the committee for the appointment of Additional Director by the Board of Directors of the Company. [For convening meeting of Nomination and Remuneration Committee, Refer the Procedure for Conducting Nomination and Remuneration Committee Meeting].
- Convene a Meeting of Board of Directors [As per section 173 & Secretarial Standard-1 (SS-1)]
- Issue Notice of Board Meeting to all the Directors of Company at their addresses registered with the Company, at least 7 days before the date of Board Meeting. A shorter notice can be issued in case of urgent business.
- Attach Agenda, Notes to Agenda and Draft Resolution with the Notice.
- Hold a meeting of Board of Directors of the Company to discuss the agenda and pass requisite Board Resolution
- to appoint an Additional Director
- to take note of the disclosure of Interest received from the Additional Director
- to authorize Company Secretary or any Director to sign and file the relevant form with Registrar of Companies and to do such acts, deeds and things as may be necessary to give effect to the Board’s decision.
- Prepare and Circulate Draft Minutes within 15 days from the conclusion of the Board Meeting, by Hand/Speed Post/Registered Post/Courier/E-mail to all the Directors for their comments. [Refer the Procedure for Preparation, Signing and Compilation of Minutesoard Meeting]
- Filing of Return of Appointment of Director with the ROC
After the Board meeting, a Return of Appointment of Directorship (Form DIR-12) is required to be filed with Registrar within 30 days of appointment with copy of Board Resolution along with Consent and Declaration. In case of Companies other than OPC and Small Company, the return is also to be certified by a Company Secretary/Chartered Accountant/Cost Accountant. Following documents will be required as an attachment with Form DIR-12
- Certified True Copy of the Board Resolution passed
- DIR-2 Consent to Act as Director
- DIR-8 Declaration by Director
- Letter of Appointment.
- Making Necessary entries in Register of Directors
Company should make necessary entries in the Register of Director and Key Managerial Personals and registers of contract and arrangements in which Directors are interested in Form MBP-4.
- File Necessary Amendment Application under following Acts
- Goods and Services Act
- Shops & Establishment Act
- Factories Act
- Foreign Exchange Management Act
- Inter-State Migrant workmen Act
- Private Security Agency Act
- Other Labour Laws
- Industry Specific Laws