FOR INDIA'S BEST CA CS CMA VIDEO CLASSES CALL 9980100288 OR VISIT HERE
Take This Quiz & Predict Your Score in the coming CA CS or CMA Exam!
  • How important it is for you to pass the exam in this attempt?
  • What percentage of course you have finished well so far roughly?
  • How many hours you study in a day?
  • How many times you have revised the topics you have finished
  • Have you taken online or pen drive or live class from a renowned faculty?
  • What percentage of the classes you have watched?
  • Have you attempted mock tests or practice tests yet?
  • Are you planning to attempt mock tests conducted by external bodies- ICAI, ICSI, ICMAI or other institute?
  • How many tests you have taken?
  • Did you manage to finish the test papers on time?
  • Are you strictly following study material provided by the exam conducting authority such as ICAI/ICSI/ICMAI/Other Body?
  • How is your health in general?
  • How is your food habit?
  • Any interest in yoga or exercise or play sports regularly?
  • Planning to sleep well nights before the exams?
  • Planning to have light food and water before exams?

APPOINTMENT OF DIRECTORS

APPOINTMENT OF DIRECTORS

As we all are aware that the New Companies Act 2013 is applicable from 01.04.2014, everyone is trying to unlock & decode the provisions of New Companies Act 2013. I am trying by my side to write about provisions relating to Appointment of Directors. Hope it will be helpful to you.

As per section 149 (1): Every company shall have board of directors consisting of Individuals as Directors. According to this section, only Individual can be director of the company.

Minimum number of directors as per section 149 (1):

In case of Public Company: 3 Directors

In case of Private Company: 2 Directors

One in case of One person company

Company can appoint maximum 15 number of directors. If they want to appoint more than 15 directors, special resolution is required in general meeting.

New categories of Directors:

  • Resident Director:  As per section 149, sub section 3 of the companies act 2013, Company must have at least one resident director i.e. a director who have reside in India for 182 days or more. The period of 182 days shall have reckoned from commencement of section 149 i.e from 1.4.2014.The period to be taken into account for compliance with these provisions will be the remaining period of calendar year 2014 i.e. 1st April to 31st December).
  • Women Director:  As per section 149 (1) (a), second proviso, a company must have at least one women director. Such companies are listed companies or any public companies having paid up capital of 100 crores or more or turnover of 300 crores or more.
  • Independent Director: Independent Director is for the first time introduced in the Companies Act, 2013 under section 149(6),
  • Additional Directors: Any individual can be appointed as additional directors by company under section 161 of the new act.
  • Nominee Director:  As per Section 161(3). Subject to AOA of company, the Board May appoint any person as a director nominated by any institution in pursuance of the provisions of any law for the time being in force or of any agreement or by the Central Government or the State Government by virtue of its shareholding in a Government company.( According to term: Subject to AOA of company mean there should be provisions in Articles of Association of Company for appointment of Nominee Director, if there is no provision in Articles of company then alter the provision in AOA).
  • Alternate Directors:  As per section 161 (2), company may appoint alternate directors in place of original director (if original director is absent from India for at least 3 months), if articles confer such right on company or resolution is passed. An alternate director cannot hod office more than the term of original director. Additionally, he will have to vacate office as and when original director returns to India. Any alteration in the term of office made in the absence of original director will apply to original director & not alternate director.
  • Appointment of directors in private companies as per new law:Practicing Company SecretaryThe liberty given to private companies to self-regulate the appointment process has, surprisingly, been completely taken away Under Companies Act-2013. This sounds completely paradoxical, in view of the fact that in case of public companies, they still have the liberty to self-regulate to the extent of one third of the board strength.Sec 152 (6) (b) provides liberty, but only to public companies, to appoint one third of the total board by a self-regulated process. While there was an exception to private companies in Sec. 255 (2) of the 1956 Act, that exception has been dropped while transporting the provisions into the new Act.

    It could not be the case that such was the intent of the lawmaker – there is absolutely no case for imposing more stringent regulations in case of private companies, than in case of public companies.

    Section 152 of the New Act governs the appointment of directors. Certain specific requirements for appointment of director as lay down in the New Act are-

    If different person are not named as first director in articles of the company, individual subscribers shall be deemed to be first directors. Every director other than first directors of company shall be appointed in general meeting as per Section 152(2). If company Want to appoint a person as director in meeting other then General meeting Company can do this by appointing such person as additional direct. 

    ADDITIONAL DIRECTOR: 

    Ensure that the director to be appointed by board of directors exercising the power so conferred in them by the Articles of the companyis not such a person who has failed to get appointed as a director in a general meeting. (If A proposal is made in General Meeting for appointment of a person as Director, if resolution got failed not passed in that meeting and that person fails to get appointed as a director in a general meeting, then that person can’t appoint as additional director). The additional director has to be appointed till date of next AGM or last date on which AGM should have been held, whichever is earlier. 

    PROCEDURE: 

  • First Check whether Articles (AOA) of the Company contain power/authorization to appoint Additional Director read with Section 161(1) of the Companies Act, 2013. {If there is no provisions in Articles of the Company then Alter the Articles of the company to have enabling clause for appointment of Additional Director.
  • Second Check whether such person have DIN No. or Not. If such person doesn’t have DIN No. then Apply for DIN.

    • Following documents are require from director to appointment him as additional director.

      • Consent in writing to act as Director in Form DIR-2 pursuant to Rule-8 of Companies (Appointment & Qualification of Director) Rules, 2014-
      • Intimation by Director in form DIR-8 in terms of Companies (Appointment & Qualification of Directors) Rules, 2014, to the effect that he/ she is not disqualified u/s 164(2) of Companies Act, 2014.- 
      • Disclosure of Interest in Form MBP-1 pursuant to Section 184(1) read with Rule 9(1) of Companies (Meetings of Board and its Powers) Rules, 2014. {One thing should be noted MBP-1 should not be dated earlier than date of his/her appointment as Director}. – 
  • However, if there is nothing to disclose on the part of new Director, even then also require to take form MBP-1 from Director. (NIL disclosure is also a disclosure under section 184(1).After receiving all the documents from the director:-  
  • Call the Board Meeting.
  • Pass Resolution for appointment of Additional Director.
  • Issue Letter of Appointment.
  • File e-form DIR-12 [Along with CTC+ Consent + Letter of Appointment)
  • File e-form MGT-14[For disclosure of interest in MBP-1]
  • Now this person will be Additional Director Till AGM of company. If company want to appoint him as director then regularize the person as director in General Meeting by Share holder Resolution. File form DIR-12 for Change in Designation of Director along with ordinary resolution. IF THE SECTION IS VIOLATEDSince the 8-lakh odd companies, sitting with more than 16-lakh directors, may not even be aware of this change of law, what is the provision gets violated? There you have section 159 to take care of – which provides for a jail up to six months, of course with/without a fine too!

APPOINTMENT OF DIRECTORS

At CAKART www.cakart.in you will get everything that you need to be successful in your CA CS CMA exam – India’s best faculty video classes (online or in pen drive) most popular books of best authors (ebooks hard copies) best scanners and all exam related information and notifications.Visit www.cakart.in and chat with our counsellors any time. We are happy to help you make successful in your exams.

 .

www.cakart.in.

Click Here to download FREE CA CS CMA Text Books.

 

 

Leave a comment

Your email address will not be published. Required fields are marked *