Appointment Of Directors In Private Companies

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Appointment of Directors: A Crucial Step in Business Management

According to Section 149(1) of the Act, every public company requires at least 3 directors, 2 directors in a private company, and 1 person in a one-person company. As per law, a maximum of 15 directors can be appointed. If a company wants to appoint more than 15 directors, a special resolution must be approved in the company’s general meeting.

Who Can Be Appointed as a Director?

Any person who is above 21 years of age can be appointed as a director, whereas an artificial person being a company, firm, association, or entity cannot be appointed as a director.

The eligibility criteria for director appointment are below:

  • The individual should be more than 21 years of age.
  • The individual should have a sound mind.
  • The individual should not be declared insolvent.
  • The individual should not be punished by a court and imprisoned for more than 6 months.

Documents Required to Appoint a Director

Frequently Asked Questions

Simple Steps for Appointment of Director to Your Private Limited Company
  • Check AOA for director appointment provision.
  • Conduct general meetings.
  • Apply for DIN.
  • Consent from the proposed director.
  • Within 30 days of appointment, forms are to be filed with the Registrar of Companies (ROC)
What are the Roles and Responsibilities of Directors?

The Companies Act 2013 (CA 2013) defined the duties of directors clearly in Section 166. India director’s duties and responsibilities in accordance with the CA 2013 are as follows:

  • To work within given powers and not abuse them.
  • To exercise skill, diligence, and care.
  • To practice independent judgment.
  • To avoid conflicts of interest.
  • Do not use the company’s property, money, or information for personal use.
  • Must ensure all business affairs are conducted, and comply with the legal requirements.
Why is there a need to add or appoint directors?
  • Get new talent on the company board
  • Prevent dilution of ownership
  • The inefficiency of existing directors
  • Meeting the statutory limit
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