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Appointment of Additional Director under Companies Act, 2013
If you’re wondering who is an additional director and how they differ from regular directors, you’re not alone. Many businesses appoint additional directors to bring in expertise or fill urgent gaps without going through the lengthy shareholder appointment process.
This detailed blog explains the meaning, legal basis, appointment process, powers, limitations, and key differences of an additional director under the Companies Act, 2013—especially relevant for private limited companies.
Who is an Additional Director? [Section 161(1)]
An Additional Director is a person appointed by the Board of Directors of a company to the Board, subject to authorization in the Articles of Association (AOA).
They hold office only till the next Annual General Meeting (AGM) or last date on which AGM should have been held, whichever is earlier.
Legal Framework – Section 161(1), Companies Act, 2013
“The Board of Directors may appoint any person, other than a person who fails to get appointed as a director in a general meeting, as an Additional Director. Such person shall hold office up to the date of the next AGM or the last date on which the AGM should have been held, whichever is earlier.”
Key Conditions:
- AOA must authorize the Board to appoint.
- They cannot continue beyond AGM unless regularized by shareholders.
- A person who failed in a previous shareholder vote cannot be reappointed as an additional director.
Difference Between Additional Director and Director
| Basis | Additional Director | Regular Director |
|---|---|---|
| Appointment Authority | Board of Directors | Shareholders (General Meeting) |
| Legal Provision | Section 161(1) | Section 152(2) |
| Tenure | Till next AGM or date AGM should be held | Permanent until resignation/removal |
| DIN Requirement | Mandatory | Mandatory |
| Form to ROC | DIR-12 | DIR-12 |
| Approval Required | AOA must authorize | Ordinary resolution by shareholders |
Procedure to Appoint
Step 1: Check Articles of Association
- Ensure AOA contains a clause empowering the Board to appoint
- If not, amend the AOA before proceeding.
Step 2: Obtain DIN, DIR-2 & DIR-8
- Confirm the person holds a valid DIN
- Obtain:
Step 3: Board Meeting
- Issue notice and agenda to all directors.
- Pass a Board Resolution for appointment
Step 4: File DIR-12 with ROC
- File Form DIR-12 within 30 days of appointment with:
- Board Resolution
- DIR-2 & DIR-8
- PAN, Aadhaar, Photograph of Director
Penalties for Non-Compliance
Penalty if form DIR-12 not filed within 30 days of appointment of –
| PERIOD OF DELAY | ADDITIONAL FEE |
| Up to 30 days | Two times the standard fees |
| More than 30 days & up to 60 days | Four times the standard fees |
| More than 60 days & up to 90 days | Six times the standard fees |
| More than 90 days & up to 180 days | Ten times the standard fees |
👉 Refer MCA Fee Calculator for exact amounts.
Tenure
The tenure of an additional director automatically expires at the next AGM unless the company passes an ordinary resolution to appoint him/her as a regular director.
Regularization
Under Section 161(1) of the Companies Act, 2013, an Additional Director holds office only till the next AGM. However, the company may choose to regularise such director either in the Annual General Meeting (AGM) or through an Extraordinary General Meeting (EGM) held earlier.
Below is a simplified combined process:
Step-by-Step Process (Applicable to Both AGM & EGM)
| Step | AGM Route | EGM Route |
|---|---|---|
| 1. Board Meeting | Pass resolution proposing regularisation in AGM | Pass resolution to convene EGM and propose regularisation |
| 2. Notice to Members | Include resolution in AGM notice with explanatory statement (Section 102) | Send EGM notice at least 21 clear days before meeting with explanatory statement |
| 3. Shareholders’ Approval | Pass Ordinary Resolution at the AGM | Pass Ordinary Resolution at the EGM |
| 4. ROC Filing | File DIR-12 within 30 days of AGM | File DIR-12 within 30 days of EGM |
| Attachments to DIR-12 | Resolution copy, DIR-2 (consent), MBP-1 (interest disclosure) | Resolution copy, DIR-2 (consent), MBP-1 (interest disclosure) |
✅ When to Use AGM Route?
- If AGM is approaching soon
- Preferred for scheduled director transitions
✅ When to Use EGM Route?
- If early confirmation is required
- To avoid legal ambiguity in case of AGM delay
Limitations
- Cannot be reappointed if rejected earlier in a general meeting.
- Cannot exceed the maximum number of directors allowed (as per Section 149).
- Cannot claim statutory tenure protections.
- Subject to retirement provisions once regularized.
Advantages of Appointment
✅ Quick induction without holding an EGM
✅ Brings in urgent expertise or industry knowledge
✅ Flexibility to test director before shareholder vote
✅ Useful for interim or transition phases in management
Common FAQs
Q1: Can a person be appointed as additional director without DIN?
No, DIN is mandatory before appointment.
Q2: Is shareholder approval required for additional director?
Not initially. But it is needed if the additional director is to be regularized.
Q3: Can a rejected candidate be made an additional director?
No. If shareholders have rejected the person, they cannot be appointed again by the Board as additional director.
Q4: Is MGT-14 required for this appointment?
No. MGT-14 is not required unless the AOA is being altered.
Final Thoughts
Appointing an additional director is a powerful tool for companies that want to strengthen leadership or fill key roles quickly and compliantly. By understanding the legal structure, process, and limitations of this role, companies can make strategic appointments without compromising governance.
