Overview on Compliances for Change in Directors in a Company

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A company is an artificial entity and as a separate legal entity it needs people to run a company. The management structure in a company includes a position of directors who are key managerial positions in any company. Directors take complete charge of operations and management in a company.

A Company can intimate about change in the Board of Directors by filing E-Form DIR-12 with the Registrar of Companies (ROC) within 30 days from the date the resolution passed at the Board meeting.

As per the Companies Act, 2013, a director is appointed in a company to manage day-to-day operations and management in a company. The directors are accountable to the company and its shareholders and are responsible for directing the whole team to work in accordance with the objectives of the company.

In any company there may arise a situation for change in directors for various reasons, such as for a better growth of business or the resignation of directors. Therefore the provisions of Companies Act, 2013 provides for the change in directors in a company through a legal process.

• Meaning of Director
• Procedure for change in Director
• Documents Required
• Compliance Fees
• Qualification
• Conclusion
• FAQs

Meaning of Director in a Company

According to the Companies Act, a director refers to an individual who is appointed or elected by the shareholders of a company to serve on its board of directors. The role of a director is crucial in the governance and management of a company, as they are responsible for making strategic decisions, overseeing the operations, and safeguarding the interests of the company and its shareholders.

The process for appointing a director in the company other than a retiring director is mentioned in Section 160 and Rule 13 of the Companies (Appointment & Qualification of Directors) Rules, 2014.

The detailed Process for change in director in a company is given below:

Step-1: Apply for DIN

Director Identification Number(DIN) is very important for every director to obtain in order to become a director in any company.

Step-2: Hold Board Meeting

Holding a board meeting is necessary for any change in the position of a director in a company. Whether there is appointment, resignation or removal of director, a consent from the board members is mandatory.

Step-3: Hold a General Meeting

A general meeting must be held to take consent from the majority of members regarding change in directors in the company.

Step-4: File Form DIR-12

According to section 152(5) of the Act read with rule 8 of the Companies (Appointment and Qualification of Directors) Rules, 2014, Form DIR-12 is required to be filed with the concerned registrar, within thirty days of the appointment of new director.

Step-5: Resignation from Directorship of the company

A director may resign from the company anytime by giving a notice to the company. The company must intimate to ROC within 30 days from the date of resignation in Form DIR-12.

Step-6: File Form DIR-11

As per section 168(1) of companies act, 2013 Form DIR-11 must be filed with ROC for the purpose of intimating about the Resigning Director.

Step-7: Hold a Board Meeting

For acceptance of resignation from the existing director.

Every resolution is required to be filed within a period of 30 days of passing a special resolution in form MGT-14 with the Registrar of companies.

Documents Required for Change in Directors

• Passport Size Photograph
• PAN Details
• Proof of Identity
• Proof of Residency
• DIN(Director’s Identification Number)
• DSC( Digital Signature Certificate)
• Personal Details such as Mobile Number, email id etc.

Compliance Fees for Change in Director

The required compliance fees for change in director will depend on the number of forms filed and applications made. For change in director there will be application for resignation of director and another form filing for appointment of a director.

Qualification for appointment of a New Director

• A director must be a person of sound mind, who can make decisions for the company.
• As per section 149, only a person or an individual can be appointed as a director in a company and not a company or a group of people.
• Director must be a solvent person, free from debts.
• He must not have been convicted by any court.

In conclusion, we would like to assert that change in directors is an event based compliance in a company and it must be intimated to the ROC within 30 days of passing of the resolution in the board meeting.

There are some forms that need to be filed with the Registrar of the companies declaring the resignation, appointment and change in director of the company.

For the process to be conducted smoothly, some guidance of a professional CA, CS would be required.