Appointment and Resignation of Directors

To manage the appointment and resignation of directors in a company in India, the Ministry of Corporate Affairs (MCA) provides a streamlined process through its online portal. Here’s a detailed procedure for both the appointment and resignation of directors:

Appointment of Directors

1. Obtain Director Identification Number (DIN):
   • Any individual intending to be appointed as a director must have a DIN. This can be obtained by filing Form DIR-3 on the MCA portal with the necessary documents (proof of identity, proof of address) and the prescribed fee.
2. Digital Signature Certificate (DSC):
   • The individual must obtain a DSC, which will be used for signing forms electronically.
3. Board Meeting:
   • Convene a board meeting to pass a resolution for the appointment of the new director. The resolution should specify the terms and conditions of the appointment.
4. Consent to Act as Director:
   • The individual must provide consent to act as a director in Form DIR-2. This consent must be filed with the company.
5. Disclosure of Interest:
   • The newly appointed director must disclose their interest in other entities in Form MBP-1.
6. Filing with MCA:
   • File Form DIR-12 within 30 days of the appointment. Attach the following documents:
     • Certified copy of the board resolution.
     • Consent to act as a director in Form DIR-2.
     • Notice of interest in Form MBP-1.
7. Update Registers:
   • The company must update its statutory registers, including the Register of Directors and Key Managerial Personnel.

Resignation of Directors

1. Resignation Letter:
   • The resigning director must submit a resignation letter to the board of directors of the company.
2. Board Meeting:
   • Convene a board meeting to take note of the resignation. Pass a resolution to accept the resignation and relieve the director from their duties.
3. Filing with MCA:
   • The company must file Form DIR-12 within 30 days of the resignation. Attach the following documents:
     • Certified copy of the board resolution accepting the resignation.
     • Resignation letter from the director.
4. Director’s Filing:
   • The resigning director must file Form DIR-11 with the MCA, providing details of their resignation. This form includes:
     • Resignation letter.
     • Proof of dispatch of the resignation letter to the company.
5. Update Registers:
   • The company must update its statutory registers, including the Register of Directors and Key Managerial Personnel.

Important Points

• Ensure all forms are signed using a Digital Signature Certificate (DSC).
• All filings with the MCA must be done within the prescribed time limits to avoid penalties.
• Keep all resolutions and documents properly documented and filed for future reference and compliance audits.
• Notify other stakeholders, if necessary, such as banks, tax authorities, and business partners, about the changes in directors.

Following these procedures ensures compliance with the Companies Act, 2013, and helps maintain proper corporate governance within the company.