A new director joins a private company in one of two ways: the shareholders appoint them at a general meeting, or, if the articles allow, the board appoints them as an additional director who must then be confirmed at the next AGM. Either way the person must hold a DIN, give written consent, and the company must report the appointment to the Registrar within 30 days.
A director can leave by resigning with a written notice, which takes effect without anyone’s approval, or be removed by the shareholders by ordinary resolution, after a special notice and a fair hearing. Each route is explained below.
When you are ready to make a change, our director change service prepares the resolutions and forms and files them with the Registrar.
Adding a director
Who can be appointed
The person needs a Director Identification Number before appointment, must not be disqualified under the Act, and must consent in writing. A private company needs at least two directors, and at least one director on the board must have stayed in India for 182 days or more in the financial year.
Two ways in
| Route | Who decides | How long the appointment lasts |
|---|---|---|
| Appointment at a general meeting | Shareholders, by ordinary resolution | Until the director retires, resigns or is removed |
| Additional director (section 161(1)) | Board, if the articles give it the power | Up to the next AGM, or the last date on which the AGM should have been held, whichever is earlier |
Most small companies use the additional-director route because a board meeting is quicker to arrange than a general meeting. The catch is the expiry: if the shareholders do not regularise the appointment at the next AGM, the person stops being a director on that date. Put the regularisation on the AGM agenda as soon as the board appoints.
The paperwork
- Consent from the incoming director in Form DIR-2, along with a declaration that they are not disqualified.
- Board or shareholder resolution appointing them, recorded in the minutes.
- Disclosure of interest by the new director in other companies and firms, at the first board meeting they attend.
- Form DIR-12 filed by the company within 30 days of the appointment, with the consent attached. Section 152(5) says a director “shall not act” unless the consent has been filed within 30 days.
- Update the register of directors and key managerial personnel.
When a director resigns
Under section 168 of the Companies Act, 2013, resignation is a unilateral act. The board does not accept or reject it; it “takes note” of it.
- The director gives a written notice of resignation to the company. They may also send a copy to the Registrar within 30 days, using Form DIR-11. That step is optional, but it protects a director whose company might delay its own filing.
- The board notes the resignation at its next meeting.
- The company informs the Registrar in Form DIR-12 and mentions the resignation in the directors’ report placed at the next general meeting.
When it takes effect
The resignation takes effect from the date the company receives the notice, or a later date the director specifies in it, whichever is later. The director remains liable for offences that occurred during their tenure, even after leaving.
If the resignation leaves too few directors
The resignation still takes effect, but the company must appoint a replacement quickly to meet the minimum of two. If every director resigns, section 168(3) requires the promoter, or failing them the Central Government, to appoint directors until the shareholders appoint new ones.
Removing a director
Shareholders can remove a director before the end of their term by ordinary resolution under section 169. The exceptions are a director appointed by the Tribunal, and an independent director re-appointed for a second term, who needs a special resolution. The process protects the director’s right to be heard:
- Special notice. A member or members holding the minimum shareholding set by section 115 and the rules give the company special notice of the resolution to remove the director.
- Copy to the director. The company immediately sends a copy of the notice to the director concerned.
- Representation. The director may make a written representation and ask that it be sent to members. The company circulates it with the notice of the meeting if there is time, or the director can have it read at the meeting.
- Hearing and vote. The director, whether or not a shareholder, is entitled to be heard at the meeting. The resolution is then put to the vote.
- Filing. If it passes, the company files DIR-12 within 30 days and updates its register.
A replacement can be appointed at the same meeting, but that appointment also needs special notice. Removal under section 169 does not cancel any compensation the director may be owed under a contract with the company.
Choosing the right route
- Adding someone quickly: board appointment as additional director, then regularisation at the AGM.
- A director wants to leave: resignation; no meeting or vote is needed to make it effective.
- Shareholders want a director out: removal under section 169; allow time for special notice and the director’s representation.
Each change also needs the company’s other records brought in line: bank mandates, authorised signatories with GST and tax portals, and the director’s DSC authorisation on the MCA portal.
Complianto (complianto.in), operated by Mentorcorp Private Limited, is a private consultancy and is not affiliated with any government body. We do not issue official documents. We charge a professional fee for application assistance and advisory services. Applicants can apply directly to the government without our fees via the official portals: MCA (mca.gov.in), Income Tax (incometax.gov.in), GST (gst.gov.in), MSME (udyamregistration.gov.in), FSSAI (foscos.fssai.gov.in), Startup India (startupindia.gov.in), and IP India (ipindia.gov.in).
This article is general information, not legal or tax advice.
