Table of Contents
The appointment of directors is a vital function in any Private Limited Company in India. Directors are responsible for the governance, management, and compliance of the company. This detailed guide covers types of appointments, legal requirements, and step-by-step procedures based on whether the appointment is made by the Board of Directors or Shareholders, in compliance with the Companies Act, 2013.
Legal Framework
- Governing Law: Section 149, Section 152, Section 161, and other related provisions under the Companies Act, 2013.
- Minimum Requirement: Every Private Limited Company must have at least 2 directors.
- Maximum Directors: Up to 15 directors can be appointed without special resolution. More than 15 can be appointed with shareholder approval.
- Eligibility to Become a Director
- Individual only (No body corporate or LLP)
- Must have a valid Director Identification Number (DIN)
- Should not be disqualified under Section 164
- At least one director must be a resident in India (stay > 182 days in previous calendar year)
Types of Director Appointments
| Appointment Type | Authority | Applicable Section |
|---|---|---|
| First Director | Subscribers to MOA | Section 152(1) |
| Additional Director | Board of Directors | Section 161(1) |
| Director in General Meeting | Shareholders | Section 152(2) |
| Alternate Director | Board | Section 161(2) |
| Nominee Director | Board / Shareholders | Section 161(3) |
| Casual Vacancy | Board | Section 161(4) |
Process 1: Appointment by Board of Directors
Applicable For:
- Appointment of Additional Director
- Filling Casual Vacancy
- Appointment of Alternate Director
Step-by-Step Procedure
1. Obtain Consent and Disclosure
- DIR-2: Written consent to act as director
- DIR-8: Declaration of non-disqualification
- MBP-1: Notice of interest by director
- DIN: Ensure the individual has a valid DIN. If not, apply via DIR-3.
2. Hold Board Meeting
- Issue 7-day notice to all directors
- Pass resolution for appointment under Section 161
- Record decision in minutes
3. File Form DIR-12 with ROC
- File within 30 days of appointment
- Attachments:
- Board Resolution
- DIR-2
- DIR-8
- MBP-1
- ID and address proof
4. Update Company Records
- Register of Directors (MBP-4)
- Website, if applicable
- Inform statutory auditors
Process 2: Appointment by Shareholders
Applicable For:
- Regular appointment in AGM/EGM
- Appointment of directors not covered under Section 161
- Increasing number of directors beyond 15
Step-by-Step Procedure
1. Consent & Eligibility Checks
- Collect DIR-2, DIR-8, MBP-1 from proposed individual
- Verify DIN, ID proof, address proof
2. Hold Board Meeting
- Approve the proposal for director appointment
- Fix date, time, and venue of EGM/AGM
- Approve Notice of General Meeting + Explanatory Statement (Sec 102)
3. Send EGM/AGM Notice
- Issue clear 21-day notice to shareholders
- Include Ordinary/Special Resolution
- Attach Explanatory Statement
4. Hold Shareholders’ Meeting
- Pass resolution (Ordinary or Special)
- Prepare minutes
5. File Form DIR-12 with ROC
- File within 30 days of passing resolution
- Attach:
- Shareholder Resolution
- DIR-2, DIR-8, MBP-1
- Proof of ID and address
6. Update Registers and Records
- Register of Directors and Key Managerial Personnel
- Update statutory disclosures and website
Sample Formats
Appointment by Board of Directors
Appointment by Shareholders
- Board Resolution to call EGM
- Shareholder Resolution Format
- Notice of General Meeting + Explanatory Statement
Common document under both process
Penalties for Non-Compliance
| 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.
FAQs
Q1: Can a foreign national be appointed as director? Yes, but at least one director must be resident in India.
Q2: Is DIN mandatory before appointment? Yes, DIN is mandatory. Apply through DIR-3 if individual doesn’t have one.
Q3: Is MGT-14 required? Not for ordinary appointments. MGT-14 is required if a Special Resolution is passed (e.g. increasing the number of directors beyond 15).
Conclusion
The appointment of directors is a statutory process that demands strict compliance. Whether by Board or Shareholders, follow proper documentation and timely filing with MCA to avoid penalties.
