CHANGE OF DIRECTOR IN PRIVATE LIMITED COMPANY

INTRODUCTION:  A director is a person who governs the general functioning of any organisation by using various skills or attributed and plays a major role in the success of any organisation. They are appointed by the company to manage day to day operations of an organisation following the applicable provisions of Companies Act, 2013. The directors of the company are responsible towards the company and the shareholders of the company for managing and directing the affairs of the company in a manner which will result in ensuring the success and profitability of a company and building the goodwill of the organisation. Any change in director of private limited company need to be intimated to the concerned ROC at the time of alteration, as this is the crucial part of the company working. A corporation can intimate change in director among Managing Director, Directors, Manager and Secretary of a company by filing e-Form DIR-12 with Registrar of Companies (ROC) within 30 days from the date when the resolution for change in director is moved in the company meeting.

PROCEDURE FOR CHANGE IN DIRECTORS OF PRIVATE LIMITED COMPANY

Any changes in the directorship of a company shall be made in accordance with the provisions of Companies Act, 2013. The change may be either addition/appointment of another director or resignation of existing director.  A Corporation has the power to remove or conduct a meeting for change of directors in pvt ltd company by passing an Ordinary Resolution (OR), given that director of private limited company or any other form of entity was not selected by the Central Government or the Tribunal.

Appointment of Director in case of change in directors of private company:

As per the provisions of Section 160 of the Companies Act, 2013, the following procedure is to be followed for appointing a person as a director in a company at the time of change in director:

1. Application for DIN: If the person to be appointed as the director does not have Director Identification Number (DIN) then apply for DIN by filing form DIR-3.
2. Holding Board meeting and passing necessary resolution: A board meeting for passing the resolution for appointment of director should have been held by giving a notice of not less than 7 days to all the shareholders and directors of the company. At such board meeting the day, date and venue of EGM OR AGM Shall be decided.
3. Convening of Extra-Ordinary General Meeting or Annual General Meeting: The notice for the general meeting shall be sent to all the stakeholders not less 21 days before the date of the meeting. At such general meeting the noting for the appointment of director is made by passing necessary resolution in this regard.
4. Issue of Letter of Appointment to the Director.
5. File E-form DIR-12 within a period of 30 days of appointment. (Along with CTC+Consent+Letter of Appointment)
6. File E-Form MGT-14 (for disclosure of interest of director in MBP-1)

Now the person will be the Additional Director of the company till the date of AGM of the company. At the subsequent AGM the director has to be regularised by passing a ordinary resolution in this regard and changing the designation of additional director to director.

DOCUMENTS REQUIRED FROM DIRECTOR:

• Consent in writing to act as Director in Form DIR-2 as per Companies (Appointment & Qualification of Directors) Rules, 2014
• Intimation by Director in Form DIR-8 as per Companies (Appointment & Qualification of Directors) Rules, 2014 that he/she is not disqualified to act as director under section 164(2) of the Companies Act, 2013.
• Disclosure of Interest in Form MBP-1

RESIGNATION OF DIRECTOR

As per the provisions of Section 168 of the Companies Act, 2013, the following procedure is to be followed for resignation of a director from a company:

1. The Director intending to resign shall give a notice for his resignation in writing to the company. (The date of resignation shall be the date of giving resignation letter or the date specified by director, Whichever is later)
2. The Director has to file E-form DIR-11 for giving effect to his resignation within 30 days of resignation along with prescribed filing fees mentioning the reason got the resignation.
3. Upon the receipt of resignation letter from the Director, The Company has to hold a Board Meeting for taking note of the said resignation and passing the necessary resolution in case of change in director.
4. Filing of Eform DIR-12 within a period of 30 days from the effective date of Resignation of Director by the Company.

Whatever the case may be there for change in directors of private company i.e. it can be Appointment or Resignation there is always an obligation to submit a extracted copy of the resolution passed in meeting of the Board of Director or General meeting of shareholders, along with the E-Form DIR-12 to the concerned ROC officials within thirty days from the date of the board meeting or effect of the resolution in case of shareholder meeting. Also the Statutory Registers of the Company has to be updated to effectively implementing the change of director in private limited company as per the Provisions of Companies Act, 2013.

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