How to Change the Director in a Private Company? Procedure to Add or Remove Director

Changing the Director in a Private Company

The company’s brain is considered to be the director. They are the people in charge of managing and controlling the company’s operations. The rotation of directors occurs in one of two ways: new directors are appointed or old directors resign. The goal of a change of directors in a private company is to secure the best possible combination of specialists on the board for the company’s best interests.

Adding or dismissing a Director requires legal documents, a board resolution, and the filing of forms with the Registrar of Companies.

Adding Director

Between the two annual general meetings, the Board of Directors may nominate an additional director, according to the rules of the Company’s Articles of Association. The new directors should only be in office until the Company’s next annual general meeting. However, the total number of directors and additional directors in a company must not exceed the maximum strength specified by the Articles of Association for the Board of Directors.

In a general meeting, the Company has decided to act in place of the original director for a period of not less than three months. In most cases, alternative directors are selected to replace a non-resident Indian or a company’s foreign collaborators.

Procedure Of Director Appointment In Private Limited Company:

  • Anyone interested in becoming a director must first obtain a Digital Signature Certificate. This is a necessity for becoming a company director. 
  • To become a director of a company, a person must have a DIN/Director Identification Number, which is obtained by filing a DIR-3 form online.
  • An approval/ consent letter has to be obtained from the person who will be appointed as a director of the company.

Removing Director

A company may remove a director at any time by passing an ordinary resolution, according to Section 284 of the Companies Act 1956.

A resolution requiring special notice is required for the removal of a director or the appointment of a director to replace a removed director. As a result, the applicant must notify the company at least 14 days prior to the meeting, and the company must notify the concerned director and members of the proposed resolution. At such a general meeting, the director has the ability to make representations and speak.

Procedure for removing a director is as follows:

  • The company can remove the directors by passing an ordinary resolution and providing an opportunity to be heard. (Note that directors appointed by the tribunal under section 242 are not covered by this clause.)
  • Specific notice of a resolution is required for the removal of a director, and the notice must also be made for the appointment of a replacement director.
  • Upon the arrival of the Board Meeting, the decision to conduct an extraordinary general meeting, as well as the decision to remove the Director will be passed subject to the approval of the investors.
  • A general meeting will be conducted after receiving 21 days’ notice. Individuals will be asked to vote on the subject at the gathering. The decision will be passed if the majority of the people agree with the decision.
  • The shareholder-removed director will be given an opportunity to explain his or her removal.
  • Shareholders must submit Forms DIR-11 and DIR-12, as well as the attachments to the Board Resolution and an ordinary resolution.
  • The name of the concerned director is removed from the Ministry of Corporate Affairs (MCA) database and website once all of the processes have been completed.

Documents required for a director’s addition or removal

  • Photograph of the new director (passport size)
  • PAN card of the director to be appointed, self-attested
  • Aadhar Card/ Voter ID/ Passport/ Driving License director to be appointed
  • DSC of the continuing director and director to be removed

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