How to Appoint or Add New Director in Private Limited Company

September 17, 2019

In Private Limited Company Directors plays main role in its functioning, Directors takes day to day decisions for business operations, Directors are key person in whom Shareholders of company trusts for their money invested, here in this article we will discuss about how a company can have new Director on its Board legally in India :

Obtain Consent of Proposed Director: 

Proposed Director Should give his consent to act as Director in the Company as per Form DIR-2 , this is very important document and company must obtain form DIR-2 form before proposing him Director of the Company.

Digital Signature of Proposed Director :

If proposed Director does not have Digital Signature , he must obtain Digital Signature from Certifying Authority in India.

Obtain Director Identification Number (DIN): 

If the proposed Director does not have DIN , he should let the company know that he does not have ,and than the Company in which he is about to be appointed as Director is required to pass Board Resolution for proposing him to be Appointed as Director of the Company , the company should apply for DIN no of the proposed person. The Resolution is required to be attached with Form DIR 3.  ( This is new requirement for obtaining DIN , as new person cannot just apply for DIN if he is not to be appointed as Director in any Company. DIN is only allotted once for lifetime of Director.

The Company should obtain all KYC documents along with necessary educational Qualification documents required as per terms of job, it is important to note that there is no minimum education qualification required to hold position of Director in the Company in India.

Issue of Notice of General Meeting: 

The Director in the Company are appointed in the General Meeting , the Company should issue notice to all the Shareholders of the Company for holding Extra Ordinary General Meeting of the Company, Please note that Notice of General Meeting should be issued in accordance with provisions of Companies Act, 2013 and rules made there under and Secretarial Standards issued by Institute of Company Secretaries of India (ICSI).

Hold Extra Ordinary General Meeting of the Company : 

Once the Notice of EGM is issued to the shareholders , now on the meeting date and time , hold the meeting and Pass the Necessary Resolution for Appointment of Director as Company.

Issue Letter of Appointment

Now issue letter of appointment to the Director of the Company mentioning terms and conditions of appointment and salary to be payable to the Director.

File form DIR-12 to ROC

Once all the above steps are completed the Company should file Form DIR-12 to ROC within 30 days form the date of appointment of Director , It is always advisable to File the Form DIR-12 within next day of appointment, so as to avoid late filing and Additional Fee.

Making Necessary entries in Register of Directors 

Company should make necessary entries in the Register of Director and Key Managerial Personals

File Necessary Amendment Application to GST, Tax Authorities  Other regulators 

The Company is required to make necessary application for Changes in Directors details in GSTN and Other Certificates, wherever applicable.

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