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.
- 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.
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Posted by: CA Neetu Saini