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Appointment, Retirement and Re-appointment of Director under Companies Act, 2013

  1. Appointment of Directors:
  • Director Identification Number (DIN): Before appointing a director, the individual must obtain a DIN from the Ministry of Corporate Affairs (MCA). The DIN is a unique identification number allotted to each director. Application for allotment of DINs to the proposed first Directors in respect of new companies shall be made in SPICe form only. Any person intending to become a director in an existing company shall have to make an application in eForm DIR-3 for allotment of DIN.
  • Board Resolution: The appointment of a director is made through a board resolution passed by the existing directors of the company. The resolution should be properly documented and maintained by the company.
  •  Intimation to RoC: After the appointment, the company must intimate the RoC within 30 days using the prescribed e-form (DIR-12) along with the required documents, such as the director’s consent to act as a director, his/her declaration of non-disqualification, and other supporting documents as specified.
  • Updated Register of Directors: The company is required to maintain an updated register of directors containing details such as their names, addresses, DINs, date of appointment, and other relevant information. The register should be kept at the registered office of the company.
  1. Retirement of Directors:
  • Retirement by Rotation: As per Section 152(6) of the Companies Act, 2013, every director, except an Independent Director, is required to retire by rotation at every Annual General Meeting (AGM). One-third of the directors, or if their number is not in multiples of three, then the number nearest to one-third, must retire from office. In the first rotation, the directors who are to retire are determined by drawing lots among those who are liable to retire. However, if the articles of a company provide a different method for determining the directors to retire, that method shall be followed. In subsequent years, the directors who have been in office for the longest period since their last appointment shall retire.
  • Re-appointment of Director: A retiring director is eligible for re-election by the shareholders at the AGM. The company can pass an ordinary resolution to re-appoint the director.
  • Intimation to ROC: The company must intimate the ROC regarding the retirement of directors using the prescribed e-form (DIR-12) within 30 days of the AGM. The form should be filed along with the necessary documents and updated directorship details.
  • Changes in Register of Directors: After the retirement of a director, the company should update its register of directors by removing the retired director’s details and recording the cessation of his/her directorship.
  • Re-appointment of Independent Director: Independent directors can be appointed for a maximum of two consecutive terms of five years each. After completing two terms, they are eligible for re-appointment only after a cooling-off period of three years.
  • Director’s Consent: A director who wishes to be re-appointed must give his or her consent in writing to the company. The consent must be filed with the Registrar of Companies (RoC) within 30 days of the AGM.
  • Notice to Shareholders: The company must give notice to the shareholders regarding the retirement of directors by rotation and their eligibility for re-election. The notice must be sent at least 21 days before the date of the AGM.

Any changes in the particulars of the directors shall be filed in form DIR-6

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