How to appoint director at the time of Company Incorporation?

Every Body Incorporate is  considered as a separate legal entity possessing a similar rights like a natural human being. It has the right to sue and get sued and enter into agreements on its own name.  However, a company cannot operate on its own without any living person operating it.  Thus, the company is operated by the team of members known as Board of Directors who have a key role to play in managing the operation of the company.  Through this blog we will take a look at the procedure of appointing the director for the first time and for further appointments.

How to appoint a director at the time of Company Incorporation?

Lawdef- How to appoint a director at the time of Company Incorporation?

Who is a director?

A director is a person appointed by the shareholder of the company to look after the crucial matter of the company as the company being the artificial person cannot do it itself.  There is a minimum number of directors requirements in different kinds of companies. Like in private company minimum 2 and maximum 15 directors are required whereas for the public company minimum 8 and maximum directors are required. There are different types of directors that perform the different functions in the company. Following are the different types of directors-

Independent Director-

The independent director is an non-executive person who is not a relationship with company and whose decision cannot be influenced by the company. To ensure the fair play in companies it is mandatory to have the independent director in the board of directors.

Small Shareholders-

There can be a small shareholder elected by them when the vote is made by atleast 1000 shareholders or 10% of them.

Woman Director-

For some companies having the certain turnover it is mandatory to have one woman director.

Additional Director-

When the person is appointed by the shareholder in between two AGM’s the person is said to be additional director.

Alternate Director–

A person is appointed as an alternate director to fill in the position of original director at the time of his absence.

Nominee Director-

When the special appointment is made by the shareholders, banks, union government etc it is known as Nominee Director.

What are the Documents for the appointment of Directors?

In order to be appointed as the director the person is required to provide the following documents-

  1. Self-Attested address and identity proof (Voter ID Card, ADHAR Card and Electricity Bill.)
  2. Self Attested Copy of PAN card.
  3. Photographs of the Proposed director
  4. The person consent to act as the director of the company.

What is the procedure of appointing a director?

  1. Acquiring his DIN number- In order to act as a director in a company it is mandatory for every director to obtain a Director Identification Number from a authorized body and quote that number while submitting the docs of the company. It is a unique 8 digit code that is allotted to directors.
  2. Obtaining Digital Signature Certificate- With the world rapidly moving digitization now every document submitted online requires the digital signature of the director. Thus every director requires the digital signatures for processing with company incorporation.
  3. Passing the resolution – First of all it is important to obtain the consent of the person to act as a director of the company. Further, a proper notice complying with all the provisions shall be sent to the directors of the company to pass a board resolution for the same. A board meeting must be conducted at the time, place and date mentioned in the notice consisting of at least the minimum number of directors required. Once the required quorum is present the resolution for appointment of directors must be passed.
  4. The appointment letter must be issued to the person who is proposed to act as a director consisting of the complete appointment details.
  5. Lastly Form DIR 12 along with the relevant docs like the resolution passed at the meeting must be submitted to the Registrar of Companies. This form must be submitted within 30 days of appointment of the director.

So with this procedure you can appoint the director for the first time and further appointments can be made in the subsequent shareholder’s meeting. Apart from it any other appointment for directors will also be made in Annual General Meetings only.