Section 160 of the Companies Act of 2013: Change in Directors

The process for appointing a member in the company as a director other than a retiring director is outlined in Section 160 and Rule 13 of the Companies (Appointment and Qualification of Directors) Rules, 2014.

Procedure for appointment of new director

• Apply for DIN, also known as Director Identification Number, by filing form DIR-3. Section 66A and Section 266B of the Companies Act of 2013 talks about DIN.
• Holding Board meetings and pass the necessary resolution.
• Hold a general meeting, not less than 21 days prior to the meeting date, all stakeholders must get notice of the general meeting. During such a general meeting, the appointment of a director is noted by adopting the necessary resolution.
• Issue the letter of appointment to the director.
• File E-form DIR-12 within 30 days of appointment.
• Note: DIR-12 needs to be filled with a copy of CTC, Consent, and director’s letter of appointment.
• File E-Form MGT-14 for disclosure of interest of director in MBP-1.

Qualifications for the appointment

• A director must be a person of sound mind.
• Only an individual or a person can be appointed as a director as per Section 149.
• Director must be a solvent person,
• He must not have been convicted of any offence by any court.

Section 168 of the Companies Act of 2013: Change in Directors

The Section 168 of the Companies Act of 2013’s provides a comprehensive explanation of the resignation of directors, which was missing from the original Act of 1956.

Procedure for the resignation of the director

• The director is required to inform the company of his intention to resign by providing a notice along with a letter explaining his reason for leaving.
• The resignation will come into effect only from the receipt date of notice by the company.
• The resigning director is required to file DIR-11 to ROC intimating about his resignation.
• The company, after receiving the notice of resignation, shall take it into effect on the receipt and pass a necessary resolution for the approval of the same.
• The company has to file DIR-12 within 30 days of the effective date of resignation.

Section 169 of the Companies Act of 2013: Change in Directors

Section 169 of the Indian Companies Act, 2013, states the overall procedure for the director removal. The section gives share holder a right to remove the director by passing a resolution in a general meeting.

Procedure for the removal of the director

• Shareholders can remove the directors by passing an ordinary resolution in general meeting.
• Special notice of the intentions of removing directors is required to be given by the shareholders.
• The company, after it received the notice, shall send the notice to all the members, at least 7 days before the date of the meeting.
• The company shall give intimation to the concerned director about his removal. The director must be given an opportunity of being heard.
• Every resolution is required to be filed within a period of 30 days of passing special resolution in form MGT-14 with ROC.