Resignation of Director & Procedure for Appointment of Director
Appointment and Resignation of Director
A director is the main source of a company. They are the managers in charge of running the business's operations. The change in directors occurs in one manner or another, either through the appointment of a new director or the resignation of an existing one. A change of directors should always be attempted to ensure that the organization has the best possible team of professionals working for it. The Board of Directors (BoD) has the authority to authorize a director's departure but shareholder's approval is also required for the appointment of a new director. Whether it is an appointment, removal, or resignation, the change is indicated to the "Ministry of Corporate Affairs".
Eligibility of Director Post
There are no particular decided qualifications for the post of the director but according to the law, only a specific natural person can be a director. Therefore, if anyone wants to be a director they must follow the following instruction.
- Age Delimitation
There are no fixed age criteria but the person who is applying should be competent to enter any post or contract. In the case of a managing director, full-time director, or independent director of a recognized authority the person should be eligible to get the director’s post if he/she is 21 or hasn't reached the age of 70.
- Establishment Of Nationality
There are no limitations. However, the company must have at least one Indian director.
- DIN Required
The person must obtain a Director Identification Number in order to be qualified for director designation. The major goal of having a DIN is to ensure that false directors do not commit fraud and that, in the event that someone does, they may be located using this specific number. if you are looking BIS Consultant in Delhi
- Maximum Number Of Valid Directors
An individual can only serve as a director for 20 different businesses at once. Only ten of these 20 businesses can be publicly traded.
- Insane or a bankrupt individual
No one who is incapable of making decisions on their own or is of unsound mind may be chosen as a director. Children, people with mental disabilities, and people in fragile mental health are all affected by this. Additionally, acting directors cannot be insolvent people or people who have filed for bankruptcy in a court of law.
- Criminal History
If a person has a criminal record and has served at least seven years in jail, they are ineligible to serve as a director. If you know anything about BIS Consultant Company. Please contact us at
- Awaiting Delinquent Returns
The person will not be permitted to retain the directorship if he has not filed prior returns for a continuous period of 3 years.
Required Documents for Appointment and Resignation of Director
- Photo: A passport-sized image of the future Director
- PAN Card: The Director's self-attested PAN card will be used.
- Evidence of residency A director for Aadhar Cards, Voter IDs, Passports, and Driving Licenses will be appointed.
- Digital Signature Certificate: DSC for both the current Director and the upcoming Director
- Identity proof previously specified as the Director's mobile number and personal and business email addresses (passport, election card, driver's license, and Aadhar card).
- If the Director is a non-resident of India, all apostilled documents must be apostille-ed.
- Resignation letter submitted to the employer with proof of delivery and, if applicable, a receipt acknowledgment.
Classes of Directors Appointed in the Company
- Managing Director: The Managing Director is given complete authority and responsibility for running the Company.
- Executive Directors: Executive Directors are more accountable and effective for the company because they manage the day-to-day operations of the company.
- Non-Executive Director: Non-Executive Directors do not engage in daily operations or judgment.
- Nominee Director: Nominee Directors are those who represent the interests of shareholders in a certified company or banks that have supplied loans; they are not the primary directors.
- Independent Director: They are chosen as independent directors by the company to supervise and guarantee good governance.
Procedure to Appoint a Director
- Selection Of the First Directors
The first directors of the company are those who are qualified to serve as directors at the time of company registration with MCA. The original subscribers to the MOA will, however, automatically display the directors of the Company during incorporation if none of the previously mentioned directors are present.
- Requirements: What Must Be Done?
MCA has introduced a new, straightforward procedure to form a Company. To become a director at the moment of establishment, a DIN(Director Identification Number) is not a prerequisite. At the time the Company is enrolled, the DIN is assigned to a secure location. Additionally, it is essential to include the directors' information in the e-form as provided by MCA. After the company is established, the Director's "master data" will be available on the MCA portal. The following director's documents should be attached when the company appoints new directors. Three DIN can be allocated at the time of the Incorporation of the Company. Therefore, only a maximum of three people can be voted as directors if the candidate does not have a DIN.
Reasons behind the Resignation of Director
- Argument Before the Board
When multiple directors collaborate regularly, a conflict of opinion should occur. As a result, the corporation's overall performance is hampered; in this situation, the directors may choose to resign.
- Better Career Opportunities
Everybody looks for a more fulfilling employment opportunity to broaden their horizons and selects the choice that feeds their inner aspiration. Similarly to this, directors may withdraw from a venture where they were chosen by AOA to serve as directors if they receive better opportunities.
- Misuse in Business Matters
When a director learns about the business's illegal actions, he may find himself drawn into them, which would explain his resignation. He decides to retire in order to shield himself from any personal accountability that might result from such conduct.
- Suspension Because of a Violation
The director may get into problems if he fails to follow the rules, violates them, or makes other mistakes.
- The Falloff In Nomination
Only the nominee directors, who are predominantly chosen by the NBFCs, and investors to serve on the BOD, are eligible. The Nominee Director may quit when the Company and Entity's transaction is complete, or he may leave after the Removal of Nomination.
Method of Director Resignation Regarding Companies
Companies Act 2013 claims that if a director or managing director resigns, the company has additional responsibilities to meet.
- The first and best alternative is for the company to adopt a joint resolution, in accordance with section 168(1) of the Companies Act, 2013, authorizing the resignation notice or letter and commission to submit Form DIR-11 outlining the Reasons for Resignation.
- The resignation report or notification and ideas for the resignation must be shared with the Registrar of Companies (ROC) using "Form DIR-11" within "30 days" of the date of removal, in accordance with Rule "16 of Companies Rule, 2014 (Appointment and Qualification of Directors)".
- The company requires the resignation notice or letter in addition to filling the eForm "DIR-11" as required for filing DIR-12 with ROC to complete the process. This is the plan for the business following the director's resignation under the Companies Act.,2013
These papers must be submitted:
- Resignation notice submitted to the BOD
- Proof of delivery
- Acknowledging receipt of the form, if any.
Our Role in Obtaining Appointment or Resignation of a Director
- Our consultants will educate you concerning each and every aspect of the appointment and resignation of the director. Including how to get it.
- JR’s skilled consultants will assist you in filling out the application form for obtaining a resignation from the director’s post.
- We will ensure a smooth procedure by ensuring proper documentation and evaluation.
- The professional consultants of JR Compliance will provide you with proper guidance during the whole procedure.
- In case of queries, we will provide you with the best possible solution for your concerns regarding appointment and resignation.
To conclude, JR Compliance can assist you in obtaining the appointment and resignation by ensuring proper documentation, evaluation, testing, etc. Moreover, to make our client understand each aspect of it, we will educate you regarding the same.
In addition, late document submission, or filling in false information in the application form can delay the process.
Thus, to avoid such inaccuracy contact our expert and experienced team immediately for professional assistance and support in the appointment and resignation of the director.