Managing Director Changes: The Process
Whether appointing, removing, or accepting a resignation, each process has a specific legal framework to ensure compliance.
Appoint a new director by passing a board resolution, followed by shareholder approval in a General Meeting. File Form DIR-12 with the ROC within 30 days.
A director resigns by submitting a written notice. The board acknowledges it, and the company files Form DIR-12. The director may also file Form DIR-11.
Remove a director via an ordinary resolution at a General Meeting, ensuring they have an opportunity to be heard. File Form DIR-12 post-removal.
Essential ROC Filings
Timely and accurate filing of forms is crucial for compliance.
Form DIR-12
Filed by the company for any change in directors (appointment, resignation, removal). Must be submitted within 30 days of the change.
Form DIR-11
Optionally filed by the resigning director to notify the ROC of their resignation, providing a personal record of the cessation.
Director Changes FAQs
Common questions about managing your board of directors.
What is a Director Identification Number (DIN)?
A DIN is a unique 8-digit identification number that is a mandatory prerequisite for any person intending to become a director in an Indian company.
Can a director be removed for not attending meetings?
Yes, under Section 167 of the Companies Act, a director automatically vacates their office if they miss all board meetings over a 12-month period, with or without leave.
What happens if Form DIR-12 is not filed on time?
Delay in filing Form DIR-12 results in significant additional fees, which increase with the duration of the delay. It also leads to non-compliance penalties.
Is shareholder approval always needed to appoint a director?
While the board can appoint an 'Additional Director', their appointment must be regularized by shareholders at the next Annual General Meeting (AGM) to continue in office.