Appointment/Change in Designation of Director (DIR-12)
Appointment/ Change in Designation of Director
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1,500/-*
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- Statutory Fees including additional fees or penalty in course of Filing of Form DIR-12 is not included in the above amount.
- Any advice given to the Client is only an opinion based on our knowledge of the Client’s particular circumstances.
- The client will be responsible for verifying the information contained in such returns and/or filings prior to approving/signing such return/filing.
- Fees Should be paid according to conversation held between the Legal Parivar Team and Client.
FORM DIR-12
A company’s director is an individual chosen by the shareholders to oversee the company’s operations in accordance with the provisions outlined in the Memorandum of Association and Articles of Association. As a company is a legal entity created by law, it can only operate through the representation of natural persons. Consequently, only living individuals are eligible to serve as directors, and the responsibility for managing the company is vested in the Board of Directors. The appointment of directors may be necessary at various intervals based on the needs and preferences of the company’s shareholders.
There may be instances where a company needs to periodically appoint additional directors to its board, responding to the demands of the business or the preferences of company shareholders. Nevertheless, such appointments must adhere to the provisions of the Companies Act, 2013, to ensure their legal validity.
Individuals aged 21 and above are eligible to serve as directors of a company. The Articles of Association (AOA) of a company must include provisions for the addition of a director. The Companies Act, 2013 outlines the procedure that a company must adhere to when appointing a new director. Private companies are required to maintain a minimum of two directors at all times, with a maximum limit of fifteen directors which can be increased by passing a special resolution.
The person proposed to be added as a company director must give his/her consent to act as the director in Form DIR-2. A person cannot be appointed as a director unless he/she gives consent to the company to hold the office as the director.
Minimum Number of Directors required in a Company:
- Private Limited Company: Two Directors
- One Person Company: One Director
- Public Limited Company: Three Directors
After Passing the resolution for director appointment and obtaining DIR-2 from the director, the company is authorized to appoint the individual as a director. Subsequently, the company is required to submit both DIR-2 and DIR-12 (Particulars of appointment of the director) after the appointment. This filing with the Registrar of Companies (ROC) must be completed within 30 days of the director’s appointment.
Moreover, listed public companies are obligated to disclose the proceedings of the general meeting related to director appointments to the Stock Exchange within 24 hours from the meeting’s conclusion, as per the SEBI (LODR) Regulations, 2015. Additionally, they must post information about the appointment on the company website within two working days.
Different Types of Directors?
- Executive Directors: These individuals play an active role in the daily management of the company and often hold specific executive positions such as Chief Executive Officer (CEO), Chief Financial Officer (CFO), or Chief Operating Officer (COO).
- Non-Executive Directors: In contrast to executive directors, non-executive directors do not engage in the day-to-day management of the company. Instead, they provide independent oversight to the company’s board and its management.
- Independent Directors: This category comprises non-executive directors who have no financial or other personal interests in the company, aside from their responsibilities as directors. The primary duty of independent directors is to safeguard the interests of the company’s shareholders.
- Additional Director is a director who is appointed at any time between two Annual General Meeting of the Company. Such additional director need to be confirmed as director in next coming AGM.
The Companies Act of 2013 encompasses various provisions pertaining to the appointment, addition, and alteration of directors within a company. Key sections include:
- Section 149: Outlines the composition of the Board of Directors, incorporating mandatory requirements such as a specified number of directors, the inclusion of a female director, and the presence of a resident director.
- Section 152: Defines the procedure for appointing directors, typically carried out during the company’s general meeting, and mandates the use of the Director Identification Number (DIN).
- Section 161: Offers guidelines for appointing additional, alternate, and nominee directors by the Board.
- Section 164: Enumerates the disqualifications that preclude an individual from becoming a director.
The following are the eligibility criteria to become a director:
- The individual should be above 21 years.
- The individual should not have an unsound mind.
- The individual should not be an undischarged bankrupt or adjudged an insolvent.
- The individual should not be sentenced by a court and convicted for more than six months.
Conducting General Meeting
The company must appoint a director by passing a resolution in a general meeting. The company may pass a resolution to appoint a director in an Annual General Meeting (AGM). If the company decides to appoint a director in the middle of the year, it may appoint a director by passing a resolution in an Extraordinary General Meeting (EGM).
In such a case, a company must conduct a board meeting to pass a resolution for conducting an Extraordinary General Meeting (EGM). The company must pass a resolution for appointing a new director. The company should file the resolution for the appointment of the director in Form MGT-14 with the Registrar of Companies (ROC) within 30 days of passing the resolution.