From Additional Director To A Director

The board of directors of a company, if authorized by the articles of association, may appoint a person as an additional director.

If a company wants to appoint a person as a director of the company but couldn’t do the same, as it is not possible to convene a general meeting then the company can appoint the person as additional director in the company till the next annual general meeting.

Term for additional director:

Additional directors can hold the office till the ensuing Annual General Meeting or the last date on which the AGM should have been held, whichever is earlier.

Powers and obligations:

Additional directors vested the same powers as a director and have the same obligations and limitations asthe director. They are entitled to appoint as a permanent director at the annual general meeting. The additional director must act in good faith for the company and its shareholders.

Procedure for the Appointment of additional director:

  • Make an application for DIN, section 153 by filing of an E-form DIR-3.
  • Obtain consent from the director
  • Form DIR-2, Section 152(5) the consent to act as a director.
  • Form MBP-1, Section 184(1) disclosure of the interest.
  • Form DIR-8, Section 152(4) qualified to become a director.
  • Hold board meetings and pass a board resolution for the appointment of additional director under section 161(1).
  • Filing of E-form DIR-12 by the company with the registrar within 30 days of passing of board resolution.

Procedure of appoint additional director as a director (i.e., Regularization of Additional Director):

  • Hold Board Meeting for calling AGM.
  • Dispatch Explanatory Statement along with Notice of AGM to the members of the company.
  • Hold the General Meeting and pass an Ordinary Resolution for the appointment as Director.
  • Filling of E Form DIR 12 with the registrar for the intimation of Change in Designation i.e., from an Additional director to a Director of the Company.

Note:

  • Maximum No. of Additional Directors: Max. number as specified in AOA.
  • Power to appoint shall be authorized under Articles of Association (AOA)
  • Powers of Additional Director: Same as Normal Director
  • Vacation of Office: Shall vacate the office up to the date of next AGM.

Qualification of additional director:

A person who is appointed as an additional director must not be disqualified to act as a director under section 164.

This content is meant for information only and should not be considered as an advice or legal opinion, or otherwise. AKGVG & Associates does not intend to advertise its services through this.

Posted by: CA Neetu Saini

AKGVG & Associates

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