{"id":24570,"date":"2019-09-14T10:17:10","date_gmt":"2019-09-14T04:47:10","guid":{"rendered":"https:\/\/enterslice.com\/learning\/?p=24570"},"modified":"2022-11-18T12:18:50","modified_gmt":"2022-11-18T06:48:50","slug":"appointment-and-regularisation-of-additional-director-as-per-companies-act-2013","status":"publish","type":"post","link":"https:\/\/enterslice.com\/learning\/appointment-and-regularisation-of-additional-director-as-per-companies-act-2013\/","title":{"rendered":"Appointment and Regularisation of Additional Director as per Companies Act, 2013"},"content":{"rendered":"<p class=\"has-drop-cap\">Director is considered as the face of the\nCompany and they are the ones who make the decision on a day to day <a class=\"glossaryLink\"  aria-describedby=\"tt\"  data-cmtooltip=\"&lt;div class=glossaryItemTitle&gt;Basis&lt;\/div&gt;&lt;div class=glossaryItemBody&gt;In finance, the &amp;quot;basis&amp;quot; is a term with several applications, including representing the difference between the spot price and the future contract price of an asset, which is vital in investment(...)&lt;\/div&gt;\"  href=\"https:\/\/enterslice.com\/learning\/terms\/basis\/\"  data-gt-translate-attributes='[{\"attribute\":\"data-cmtooltip\", \"format\":\"html\"}]'>basis<\/a>. As\nper section 149(1) of the Companies Act, 2013 only an individual can be a\nDirector of the Company. If the Board of Directors wants one or more Director\nto be appointed in a Company for any reason and without conducting annual\/extra\nGeneral Meeting, the Board can appoint an individual as an Additional Director\nof the Company.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Which section is governed by the Companies Act, 2013 for the appointment of\nthe Additional Director?<\/h2>\n\n\n\n<p>Section 161(1) of the <strong>Companies Act, 2013<sup><a href=\"https:\/\/www.indiacode.nic.in\/handle\/123456789\/2114?view_type=browse&amp;sam_handle=123456789\/1362\">[1]<\/a><\/sup><\/strong> is governed for the appointment of the Additional Director<\/p>\n\n\n\n<p><strong><em>Points to be remembered<\/em><\/strong><\/p>\n\n\n\n<ul><li>Any individual who is proposed to be appointed as an Additional Director in the Company first needs to be authorized by the Article of Association of the Company. If not authorized then it needs to amend the Article of Association.<\/li><li>The Individual who is going to be appointed as the additional director must have avalid DIN.<\/li><li>To ensure that the maximum number of directors don&rsquo;t exceed after appointing an additional director as prescribed under the Companies Act, 2013.<\/li><li>The appointee is not disqualified for <a href=\"https:\/\/enterslice.com\/learning\/appointment-directors-companies-act-2013\/\"><strong>appointment as a Director<\/strong><\/a>.<\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\">What are the Duties and Liabilities of Additional Director?<\/h2>\n\n\n\n<p><strong><em>The duties and liabilities of the additional\ndirector are the same as the other directors are on Board. The duties and\nresponsibility which include but not limited to:<\/em><\/strong><\/p>\n\n\n\n<ul><li>It shall act according to the <a href=\"https:\/\/enterslice.com\/learning\/articles-of-association\/\"><strong>Article of Association<\/strong><\/a> of the Company.<\/li><li>It shall act in good faith, to promote the object of the Company and in the best interest of the Company.<\/li><li>The director of a company shall exercise his duties with due and reasonable care, skill and diligence and shall exercise independent judgment.<\/li><li>The director of a company shall not have any direct or indirect interest that conflicts, or possibly may conflict, with the interest of the company.<\/li><li>The director of a company shall not achieve or attempt to achieve any undue gain or advantage either to himself or to his relatives, partners, or associates and if such director is found guilty of making any undue gain or advantage, he\/she shall be liable to pay an amount equal to that gain to the company.<\/li><li>The Director shall not assign his office or any assignment so made shall be void.<\/li><\/ul>\n\n\n\n<div class=\"shadow2\"><strong>Notes:<\/strong> If a\ndirector of the company contravenes the provisions of this section such director\nshall be punishable with fine which shall not be less than one lakh rupees but\nwhich may extend to five lakh rupees.<\/div>\n\n\n\n<h2 class=\"wp-block-heading\">Procedure for Appointment of Additional Director<\/h2>\n\n\n\n<ul><li><strong>Check the Article of Association of the\nCompany;<\/strong><\/li><\/ul>\n\n\n\n<p>First, check the Article of Association of the Company whether it is authorized for the <a href=\"https:\/\/enterslice.com\/learning\/appointment-and-regularisation-of-additional-director-as-per-companies-act-2013\"><strong>appointment of additional Director<\/strong><\/a> if not authorized by the Article of Association then it needs to alter the Article of Association to insert enabling clause for the appointment of the Additional Director.<\/p>\n\n\n\n<ul><li><strong><a class=\"glossaryLink\"  aria-describedby=\"tt\"  data-cmtooltip=\"&lt;div class=glossaryItemTitle&gt;Allotment&lt;\/div&gt;&lt;div class=glossaryItemBody&gt;An allotment is the systematic distribution of business resources, often pertaining to the distribution of shares during initial public offerings (IPOs) to underwriting firms or to new and(...)&lt;\/div&gt;\"  href=\"https:\/\/enterslice.com\/learning\/terms\/allotment\/\"  data-gt-translate-attributes='[{\"attribute\":\"data-cmtooltip\", \"format\":\"html\"}]'>Allotment<\/a> of DIN and Obtaining DSC<\/strong><\/li><\/ul>\n\n\n\n<p>For appointing an individual as an additional director in the Company the appointee must hold the DIN number. If the appointee is not holding the DIN then it required to apply, the application for allotment of DIN can be applied through the Company in which he\/she proposed to be appointed as an Additional Director. To apply for the DIN the <a href=\"https:\/\/enterslice.com\/learning\/importance-of-digital-signature\/\"><strong>Digital Signature Certificate<\/strong><\/a> (DSC) is also required of the appointee.<\/p>\n\n\n\n<ul><li><strong>Board Meeting approval for the appointment\nof Additional Director<\/strong><\/li><\/ul>\n\n\n\n<p>The proposed Director if already holding\nthe DIN then the Board Meeting to be convened for the appointment of the\nAdditional Director and for the same the resolution is required to be passed.\nOnce the resolution is passed Form DIR-12 is required to be filed with the\nRegistrar of Companies within 30 days from the date of passing of the resolution.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Documents required for the appointment of the Additional Director<\/h2>\n\n\n\n<ul><li>DIR-2 Consent to act as a Director to be taken from the proposed Director before the appointment. <\/li><li>DIR-8 intimation by Director that he is not disqualified under section 164(2) of the Companies Act, 2013.<\/li><li>MBP-1 Disclosure of Interest by Director.<\/li><li>Appointment Letter to be issued by the Company.<\/li><li>The Resolution passed at the <a href=\"https:\/\/enterslice.com\/learning\/importance-of-minutes-of-board-meeting\/\"><strong>Board Meeting<\/strong><\/a> for the appointment of Additional Director.<\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\">Regularization of Director <\/h2>\n\n\n\n<p>The Individual who is appointed as an additional\ndirector in the Company his\/her term will be up to the ensuing General Meeting\nof the Company. After getting approval from the <a class=\"glossaryLink\"  aria-describedby=\"tt\"  data-cmtooltip=\"&lt;div class=glossaryItemTitle&gt;Shareholder&lt;\/div&gt;&lt;div class=glossaryItemBody&gt;A shareholder is an individual or entity that owns at least one share of a company&amp;#039;s stock, granting them partial ownership of the company. This status allows them certain rights, including(...)&lt;\/div&gt;\"  href=\"https:\/\/enterslice.com\/learning\/terms\/shareholder\/\"  data-gt-translate-attributes='[{\"attribute\":\"data-cmtooltip\", \"format\":\"html\"}]'>shareholder<\/a> he\/she will be\nregularized as a Director of the Company.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Procedure for Regularization of Director<\/h2>\n\n\n\n<p>The additional director intending himself\nor Member proposes him\/her to appoint as a Director, a notice of not less than\nfourteen days must be given to the Company along with the deposit of Rupees One\nLakh<strong>*<\/strong> before the date of General\nMeeting which shall be refunded to such person if the person proposed gets\nelected as a Director or gets more than twenty-five percent of total valid\nvotes cast either on a show of hands or on a poll of such resolution.<\/p>\n\n\n\n<p>Inform the Members at least seven days\nbefore the date of the General Meeting of the Company. It is not necessary to\nserve the individual notice to the Shareholder if the Company advertises such\ncandidature not less than seven days before the meeting at least once in a\nvernacular newspaper in a principal vernacular language of the district in\nwhich the registered office of the Company is situated and at least once an\nEnglish language in an English newspaper circulating in that district. <\/p>\n\n\n\n<p>Convene the general meeting and pass the\nOrdinary Resolution for the same.<\/p>\n\n\n\n<p>File the Form DIR-12 with the registrar\nof companies within 30 days from the date of passing of the resolution approved\nby the Members.<\/p>\n\n\n\n<p><b>1.<\/b> In case of private Companies depositing\nof Rupees One Lakh does not apply.<\/p>\n<p><b>2. <\/b>In case of Nidhi Companies Rupees Ten thousand\nto be deposited instead of Rupees One Lakh.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Conclusion<\/h2>\n\n\n\n<p>The Company can appoint additional Director if authorized by the Article of Association of the Company and if appointed then the term of an additional director shall be up to the ensuing General Meeting of the Company. The duties and liabilities of an additional Director are same as duties and liabilities vested to other directors. So if any Company intending to appoint as additional director and want the process to be followed as per the company Act, 2013, we are having the experienced professional team to carry out the above mentioned process. Kindly contact us at <a href=\"https:\/\/enterslice.co\"><strong>Enterslice<\/strong><\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Director is considered as the face of the Company and they are the ones who make the decision on a day to day basis. As per section 149(1) of the Companies Act, 2013 only an individual can be a Director of the Company. If the Board of Directors wants one or more Director to be [&hellip;]<\/p>\n","protected":false},"author":4,"featured_media":24596,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[2369],"tags":[],"acf":{"service_id":"217"},"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v14.6.1 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Procedure for Appointment of Additional Director - Enterslice<\/title>\n<meta name=\"description\" content=\"Appointment of additional Director if not authorized by the Article of Association then it needs to alter the Article of Association to insert enabling.\" \/>\n<meta name=\"robots\" content=\"index, follow\" \/>\n<meta name=\"googlebot\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<meta name=\"bingbot\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/enterslice.com\/learning\/appointment-and-regularisation-of-additional-director-as-per-companies-act-2013\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Procedure for Appointment of Additional Director - Enterslice\" \/>\n<meta property=\"og:description\" content=\"Appointment of additional Director if not authorized by the Article of Association then it needs to alter the Article of Association to insert enabling.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/enterslice.com\/learning\/appointment-and-regularisation-of-additional-director-as-per-companies-act-2013\/\" \/>\n<meta property=\"og:site_name\" content=\"Enterslice\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/enterslice\" \/>\n<meta property=\"article:author\" content=\"enterslice\" \/>\n<meta property=\"article:published_time\" content=\"2019-09-14T04:47:10+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2022-11-18T06:48:50+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/enterslice.com\/learning\/wp-content\/uploads\/2019\/09\/Appointment-and-Regularisation-of-Additional-Director.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"1200\" \/>\n\t<meta property=\"og:image:height\" content=\"630\" \/>\n<meta name=\"twitter:card\" content=\"summary\" \/>\n<meta name=\"twitter:creator\" content=\"@enterslice\" \/>\n<meta name=\"twitter:site\" content=\"@enterslice\" \/>\n<!-- \/ Yoast SEO plugin. -->","authorName":"Narendra Kumar","authorImageUrl":"https:\/\/enterslice.com\/learning\/wp-content\/uploads\/2019\/04\/nk-1.jpg","authorDescription":"Experienced Finance and Legal Professional with 12+ Years of Experience in Legal, Finance, Fintech, Blockchain, and Revenue Management.","postViews":1109,"readingTime":4,"nextPost":{"id":24635,"slug":"section-115h-and-its-impact-on-income-of-nri"},"prevPost":{"id":24603,"slug":"esdp-ati-schemes-under-msme%ef%bb%bf"},"featuredMediaUrl":"https:\/\/enterslice.com\/learning\/wp-content\/uploads\/2019\/09\/Appointment-and-Regularisation-of-Additional-Director.jpg","postTerms":"Compliances","_links":{"self":[{"href":"https:\/\/enterslice.com\/learning\/wp-json\/wp\/v2\/posts\/24570"}],"collection":[{"href":"https:\/\/enterslice.com\/learning\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/enterslice.com\/learning\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/enterslice.com\/learning\/wp-json\/wp\/v2\/users\/4"}],"replies":[{"embeddable":true,"href":"https:\/\/enterslice.com\/learning\/wp-json\/wp\/v2\/comments?post=24570"}],"version-history":[{"count":0,"href":"https:\/\/enterslice.com\/learning\/wp-json\/wp\/v2\/posts\/24570\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/enterslice.com\/learning\/wp-json\/wp\/v2\/media\/24596"}],"wp:attachment":[{"href":"https:\/\/enterslice.com\/learning\/wp-json\/wp\/v2\/media?parent=24570"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/enterslice.com\/learning\/wp-json\/wp\/v2\/categories?post=24570"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/enterslice.com\/learning\/wp-json\/wp\/v2\/tags?post=24570"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}