There must be a minimum of three directors for a public limited company. As and when required, directorships can be changed at any time. In addition, in order to exhibit the change a company must follow the rules stipulated under the Companies Act. The change includes the addition or removal of directors for a Public Limited Company. A resolution passed in the general meeting can be used to add or remove directors of a Public Limited Company.
The Board of a Public Limited Company has Appointed a New Director
It is only through a general meeting with shareholder approval that a director can be added to a company. Furthermore, this takes place through an annual general meeting or by calling an extraordinary general meeting. Sometimes it is not feasible to wait for an annual general meeting or call an extraordinary general meeting. A company can, in such circumstances, appoint an additional director at a board meeting, and then regularize that director at the removal of director in private limited company
- Signatures using digital technology.
- It is necessary for the director to have a DIN.
- In Form DIR-2, you consent to acting as a director.
Addition of Directors to a Public Limited Company
- A general meeting or an extraordinary general meeting
- Directors are notified that a board meeting will be called
- The Board should pass a resolution calling for a general meeting.
- The General Meeting notice should be sent to all shareholders.
- AGM or EGM resolution to add a director must be passed.
- Within 30 days of appointment, submit form DIR-12 to MCA.
- The directors appoint
- To call a board meeting, send a notice to all directors.
- Pass Resolution for appointment of Director.
- File Form DIR-12 with MCA after the appointment.
- Regularize the additional director at the AGM.
In a Public Limited Company, a Director is Removed
Several reasons can lead to the removal of a director, including:
- He resigns voluntarily
- Board removal of director suo-moto.
- In the absence of three consecutive board meetings by the director.
Director’s voluntary resignation
- Board members accept the resignation of the Director who wishes to resign.
- The company also holds a board meeting with 7 days’ clear notice. (Clear notice means 21 days notice excluding the day the notice was sent and received.)
- An acceptance or rejection of the resignation will be decided at the Board Meeting.
- Upon accepting the resignation of a director, the Board will pass a resolution.
- A copy of the Board Resolution and a letter of resignation should also be submitted along with form DIR-11.
- Form DIR-12 must be filed with MCA by the company.
- In the Ministry of Corporate Affairs website, the name of the director will be removed once the forms are filed.
Board removes director Suo-moto
- All directors should receive seven days’ notice of a board meeting, as well as a special notice about a director’s removal.
- In the Board meeting, pass a resolution calling for an Extraordinary Board Meeting. Along with this, pass a resolution for the removal of the director.
- It is required to give 21 days’ notice for the EGM. If a majority of members approve the resolution, it will be adopted.
- In any case, the director will be given the opportunity to be heard before the resolution is passed.
- Form DIR-11 shall be filed by the company and Form DIR-12 by the director after the resolution is passed.
- The name of the director will be removed from the company’s master data after all forms have been submitted.
Is it possible for a body corporate to become a company director?
An individual can only be appointed as a director in a company, not a body corporate.
What are the requirements for adding a new Director?
New directors must meet the following criteria in order to be added:
It is required that the proposed candidate be a major.
According to the Companies Act, 2013, he or she must qualify as per the applicable laws.
An individual’s appointment must be consented to by the Board Members.
Directors are not required to hold any educational qualifications under the Companies Act.
- What Are the Rules for the Appointment and Removal of a Director of a Company?
- Why Are Directors Removed for Cause?
- Remove a Director from a Company