Addition of New Directors

A person who is elected by the shareholder to manage the company affairs as per the AOA and MOA. As a company is a legal artificial person, it can only act through the natural person. However, the director should be a living person, and the management of the company is entrusted to its Board of Directors. The appointment of directors can be required from time to time as per the requirement of the business and shareholders.

How to add a Director to a Company?

The director of the company plays a vital role in the functioning of the company. Day-to-day decisions and operation of the business are handled by the directors. Shareholders invest their money in the company based on the trust of directors.

  • Consent of the Proposed Directors
    The consent of the proposed director is necessary. As per Form DIR-2, director consent is a crucial document and the company is required to get the FORM DIR-2 before initiating the director hiring appointment process.
  • Digital Signature Certificate The proposed director must have a digital signature certificate.
  • Direct Identification Number (DIN)
    If the proposed director does not have DIN, a company should apply for DIN for the proposed director. It should be attached with the form DIR3. DIN can be obtained for the person of age 18+ and the same number can be used for the lifetime. Anyone can obtain the Direct Identification Number, whether the person is an Indian resident or foreigner to be appointed as the Directors in a Private Limited Company in India.

Who is a Director in a Private Limited Company?

A person/director who is appointed to the board of the company as per the Companies Act, 2013. The group of board of directors is elected by the shareholder to control the affairs of the company. The company can act only through the agency of the natural person as it is a legal entity that is created by law.

Also, the Director is a person who administrates, controls or directs something. Types of Director in Company

Different types catagories of directors are:

  • Managing Director

    It is the director chosen as per the Articles of Association of the company or a general meeting is to be passed by the board of directors. The board of directors held substantial power of management of company affairs.

  • Whole-time Director or Executive Director
    Someone who is in Full-time employment at the Company is an executive director or the whole director.
  • Ordinary Director

    Ordinary directors attend the board meetings of a company and participate in matters. The ordinary directors are not whole-time directors or managing directors.

  • Additional Director

    The annual Additional director is appointed by the board of directors between the two annual general meetings held as per the Articles of Association of a Company. These directors have to hold office till the next annual general meeting. However, both directors and additional directors should not exceed the maximum limit, fixed by the Articles of Association.
    In most scenarios, the alternate directors are appointed hired for a person who is a non-resident or the Foreign collaborators of a company.

  • Professional Director

    A professional director is a director with professional qualifications and does not have an interest in managing the affairs of the company. Usually, professional directors are appointed hired to use their expertise and experience in the management of the company.

  • Nominee Director
    The private equity investors who provide equity to the company and banks, generally demand to appoint their representatives in the team of board of directors. The presenter of these investors is known as Nominee Director.

Maximum and Minimum Number of Directors in Private Limited Company :

A corporate body cannot be appointed as the Director in a private limited company. Hence, a living person can only be appointed as the director of the company. A private limited company can have 15 directors maximum, the number can be increased by passing the special resolutions for the directors appointment.

How many minimum directors can the following entities have?

Private Limited Company- Minimum two directors

Limited Company- Minimum three directors.

One Person Company- Minimum one director.

Director in Private Limited Company

The Companies Act, 2013 prohibits the appointment of any foreigner or NRI as the director of the company. Also, according to Section 149(3), every company must have one director who has stayed in India for more than 182 days as per the previous calendar.

Women Director

At Least there should be one woman as the director in the company for the Listed companies and limited companies which have an annual turnover of more than Rs. 100 crores.

Frequently Asked Questions

Who Cannot be a director of a company?

If you are disqualified by the company’s Articles of Association, undischarged bankrupt, or disqualified by the court order, you cannot become the director of the company.

What details do you need to appoint a director?

Documents Details required to appoint a director are: DIN No., appointment date, the full name of the new director, date of birth, business occupation, permanent residential address, service address and other directorship details .

Can shareholders remove directors?

Shareholders can remove directors as per the provisions of Companies Act, 2013 resolution S203D. Despite any agreement or contractor with the director, shareholders can remove the directors.

Can you make someone a director without shares?

Both shareholders and directors have different responsibilities. Shareholders own the company by owning the shares and directors manage the company. Director does not need shares to become the company director.