Compliances for Addition of Director in a Company

Addition of director is a process of adding one or more directors in the Board of directors of a company of any type, Pvt Ltd, Section 8 or LLP etc. the addition and removal of a director can be done anytime in a company. The position of a director is a key important position in a company that is responsible for making important decisions in the company.

To add or appoint a director in a company, you need to follow a detailed process by getting approval from the board members. A person who is appointed to the Board of Directors is called a “Director” Under the section 2 (34) of the Companies Act, 2013. Director is responsible for carrying out responsibilities and duties of a director in decision making and other important issues. Read through this page to know about the process of addition of a Director in a Company.

How To Add A Director To Your Company?

The process of addition of a Director in a Company includes the below mentioned steps.

Obtain Consent From The Proposed Director

The proposed director must give his consent to act as a Director in the company by filing the Form DIR-2 at the Registrar of the Companies.

Creation Of DSC For Proposed Director

A Digital Signature Certificate(DSC) should also be created for the proposed director of the company. DSC is an important certificate which is used to sign documents digitally during the application process.

Obtain DIN(Director Identification Number)

DIN is a very important number for a director, it is a unique number which is issued to every director, who is aspiring to be a director in a company. While adding a director to the board of directors, it is important to obtain DIN for the proposed director. The board has to take resolution for the appointment of the proposed director in the company.

Issue Notice Of General Meeting

A proposed director must be issued in a board meeting and the notice of the general meeting must be issued to all the shareholders of the company. The notice of the General Meeting must be issued in accordance with the provisions mentioned in the Companies Act, 2013. In the General meeting pass the resolution for appointment of the proposed director with the consent of all the existing directors of the company.

Issue Letter Of Appointment

Now issue the letter of appointment to the proposed director mentioning all the terms and conditions related to appointment, roles and responsibilities and salary payable to the director.

File Form DIR-12 To ROC

After the appointment letter to the director is issued, file form DIR-12 to ROC within 30 days of the date of appointment of director. It is advised to file form DIR-12 as soon as possible to avoid late fees.

Making Necessary Entry In Registry Of Directors

After the appointment process, make necessary entries in the registry of directors, mentioning the positions of key managerial positions.

Make Amendment to Necessary Documents

The company is then required to make necessary changes in Directors Details in GSTIN and other Certificates of the company.

Documents Required for Appointment of Director

Given below is the list of documents required for Appointment of a Director in a Company.

• Passport Size Photograph
• PAN Card for Indian Directors
• Passport for Foreign Directors
• DSC for Proposed Directors
• DIN for Proposed Directors
• Residence Proof(Utility bills, Aadhar Card)

Why is a New Director Added in a Company?

There are various benefits of adding a new director in a company which are given below:

1. Increased expertise: Directors bring with them a wealth of knowledge and experience, which can be invaluable to a company. They can offer insights and guidance in areas such as strategy, finance, marketing, operations, and legal matters or any other matter in which they have expertise.
2. Improves accountability: Directors are responsible for the overall governance of an organization, which includes ensuring that the organization is run ethically and in compliance with all applicable laws and regulations as mentioned in the Articles of Association of the company. This can help to reduce the risk of legal or reputational issues.
3. Fosters Decision-Making: With the input of a director, the decision-making process can be more thorough and effective. Directors can bring a fresh perspective to discussions and challenge assumptions, leading to better outcomes. Directors are experienced persons and well versed with the working of a company.
4. Increased credibility: The presence of a director in a company can enhance the credibility of an organization, particularly if the director has a strong reputation in their field. This can help to build trust with stakeholders, including customers, investors, and shareholders.
5. Helps in succession planning: Directors can play a key role in succession planning, helping to identify and develop talent within the organization. This can ensure that the company is well-positioned for the future, with a strong leadership pipeline in place.
6. To Meet the Statutory Requirements: it is mandatory for a company to have a minimum of 2 directors, therefore in case of unforeseen events like death of a director, or retirement plans of existing directors will require to add a new director in the company.

Why Professional Utilities?

We are a team of practising professionals having years of experience in Company Incorporation, we can help you out in adding a director to your company. Just reach out to us by filling up the contact form. Contact us for any services related to Company Incorporation and addition of directors etc.

Conclusion

Addition of Director in a Company involves approval from the existing board member through a resolution passed in the Annual General meeting or extraordinary General Meeting called for the purpose of appointment of a new director. After this it is mandatory to file Form DIR- 2 for adding a director to the company.

Get help from Professional Utilities in adding a Director to your Company, just contact our team through the contact us form.

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