Appointment of directors for this blog post does not include re – appointment of directors as such. But surely provisions are different only on compliance with Section 160 of the Companies Act 2013.
When an appointment of a director is proposed, the process starts with Notice of candidature under Section 160.
A person who is not a retiring director in terms of section 152 shall, subject to the provisions of this Act, be eligible for appointment to the office of a director at any general meeting, if he, or some member intending to propose him as a director, has, not less than fourteen days before the meeting, left at the registered office of the company, a notice in writing under his hand signifying his candidature as a director or, as the case may be, the intention of such member to propose him as a candidate for that office, along with the deposit of one lakh rupees or such higher amount as may be prescribed which shall be refunded to such person or, as the case may be, to the member, if the person proposed gets elected as a director or gets more than twenty-five percent of total valid votes cast either on show of hands or on poll on such resolution. The company shall inform its members of the candidature of a person for the office of director under sub-section (1) in such manner as may be prescribed.
Further procedure related to the notice is explained under Rule 13 of the Companies (Appointment and Qualification of Directors) Rules 2014.
The company shall, at least seven days before the general meeting, inform its members of the candidature of a person for the office of a director or the intention of a member to propose such person as a candidate for that office-
(1) by serving individual notices, on the members through electronic mode to such members who have provided their email addresses to the company for communication purposes, and in writing to all other members; and
(2) by placing notice of such candidature or intention on the website of the company, if any.
It shall not be necessary for the company to serve individual notices upon the members as aforesaid, if the company advertises such candidature or intention, not less than seven days before the meeting at least once in a vernacular newspaper in the principal vernacular language of the district in which the registered office of the company is situated, and circulating in that district, and at least once in English language in an English newspaper circulating in that district.
This notice is not required in case of reappointment of a director retiring by rotation. This shall be followed by moving the motion before the general meeting, consideration, debate, passing of the resolution and finally in appointment of a director. Yes, postal ballot or electronic voting may take place in accordance with the Companies Rules. Finally, there will be a return of appointment.
Rule 18 of the Companies (Appointment and Qualification of Directors) Rules 2014 laid down procedure for return of Appointment.
A return containing the particulars of appointment of director or key managerial personnel and changes therein, shall be filed with the Registrar in Form DIR – 12 along with such fee as may be provided in the Companies (Registration Offices and Fees) Rules, 2014 within thirty days of such appointment or change, as the case may be.
DIR – 12:
- You can file this eForm with different event dates (date of appointment, date of change in designation and date of cessation) only if these dates are within 30 days of the filing date. If any of the date(s) are beyond 30 days, then separate form is to be filed for every such event date.
- For filing of details of two or more events (for example, appointment and cessation) relating to the same person, you are required to file separate forms. These cannot be filed through the same eForm.
- It is advised that you file the eForm in the chronological order of events. It implies that before filing this eForm you should ensure that no Form DIR-12 is pending to be filed for the particular company where the date of event is earlier than the date(s) entered in this form.
- If number of directors is more than 15, addendum is required to be filed with eForm DIR12. Addendum shall be allowed to be filed only for those cases where eForm DIR-12 has been filed and corresponding Form DIR-12 Addendum is required to be filed. EForm DIR-12 Addendum shall be allowed to be resubmitted only for those cases where the eForm DIR-12 Addendum is pending for resubmission eForm DIR-12.
- CIN and DIN helps to pre – fill many details.
- Select whether the person is being appointed or is ceasing to be associated with the company or there is change in designation. In case of a new company, only appointment can be selected.
- Select the designation of the person from the drop down values. In case of change in designation, select the new designation. In case of cessation, select the same designation as at the time of appointment or change in designation. When an existing director becomes a Managing Director/Whole Time Director; or an existing Managing Director/Whole Time Director ceases to be so and only remains as a director, then also the option Change in Designation should be used to file the eForm.
- Select the category which is most appropriate. This is not required to be selected in case of cessation. Independent category can be selected only if company is a public company. Select one or more options that whether the director is Chairman, Executive or Non – Executive (Executive and Non – Executive director, both cannot be selected). It shall be mandatory to select either executive director or non – executive director if the option chairman is selected. Option ‘Non – executive director’ cannot be selected if designation selected is Whole-time director or Managing director. If ‘Independent’ is selected under category then ‘Executive director’ cannot be selected.
- In case of an alternate director, enter the DIN of the director to whom the appointee is alternate and click “Pre-fill” button. System will automatically display the name of the director to whom the appointee is alternate. This is not required to be entered in case of cessation and is mandatory in case designation selected is Alternate Director.
- In case of appointment of a nominee director, enter the name of the company or institution whose nominee the appointee is. This is mandatory in case of nominee director and in case of appointment or change in designation.
- In case of cessation:
o System will automatically select Director or Managing Director on the basis of the designation selected in the eForm.
o Enter the date of cessation and select the reason of cessation from the drop-down list.
o Nomination withdrawn by appointing authority can be selected only if the Designation entered is nominee director.
o Date of cessation entered should be same as date entered while disabling DIN in case of death.
o Vacation of office or Not been reappointed can be selected only if the designation entered is alternate director or additional director.
- Interest in other entities is required to be mentioned in case of appointment only. User can enter the details of one such entity and if the number is more than one, then user is required to attach sheet separately for such details.
Attachments:
o Letter of appointment is mandatory to attach in case of an appointment of a Director / Manager / Company Secretary / CEO / CFO.
o Declaration by first director in Form INC-9 is mandatory to attach in case of a new company.
o Declaration of the appointee director, managing director, in Form No. DIR-2 is mandatory to attach in case of appointment of a Director / Manager / Company Secretary / CEO / CFO.
o Notice of resignation is mandatory to attach in case cessation is due to resignation of a Director.
o Evidence of cessation is mandatory to attach in case of cessation of a Director / Manager / Company Secretary / CEO / CFO.
o Interest in other entities of director it is mandatory to attach in case number of entities entered is more than one.
Fee for filing e-Forms or documents in case of company have share capital:
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Fee for filing e-Forms or documents in case of company not have share capital
Rupees 200
Please note: I welcome your comments and feedback. This blog post is not a professional advice. Readers may share this post on social media by using buttons given here.
AishMGhrana 
Do we need to issue Letter of Appointment to every Directors (other than Independent Director)? The Act only provides for issue of Letter of Appointment to independent Director only. I could not find any provisions either in Act or Rules, requiring issue of Letter of Appointment to all the Directors. Further, Now a Days, DIR – 12 of Private Company can be filed without attaching Letter of Appointment, what is your take on the above. Thanks
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Help file for DIR – 12 make letter of appointment mandatory.
Otherwise, I propose it to be mandatory as good Secretarial and Corporate Governance practice. I hope, Secretarial Standards shall also make letter of appointment mandatory.
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Thanks for quick revert. However, there is no backing of Act or Rules to the same. It seems that now MCA is making law by Help file rather than through Act or Rules. And upon realising this blunder, MCA must have made change in in-built checks of Form DIR 12, so that we can now file the Form DIR 12 without attaching Letter of Appointment. So, if we file DIR 12, without attaching letter of Appointment, I do not think, we professionals, while certifying such Form DIR – 12, are defaulting any provision of the Act or Rules. What’s your say. Thanks
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Help file (as good as departmental circular) is binding on MCA, and any approval of From DIR – 12 without mandatory attachment may go against them (in court of Law).
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In my view DIR-12 can be submitted without any attachment only in case of change in Designation of Additional Director to Director by his / her regularisation in AGM. Please comment.
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Sir,
We have appointed the Director in casual vacancy through Board Meeting and in ensuing AGM We wish to regularise the appointment of this director who was appointed in casual vacancy caused due to resignation of other Director.
What are all the form we need to file for such regularisation and what are the mandatory attachment.
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what will be the implication if company not filed DIR-12within 30 days of appointment
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File with late fees.
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There is already Independent Directors on the Board.
But in this AGM, we appointed them with fresh tenure of five years.
Shall we need to file any form with MCA in this regard??
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In my opinion, yes legally.
We need to check procedure, whether forms etc are supporting this legal position.
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Sir,
We have filed DIR-12 for appointment of additional director in a private company but as Non-Executive director. But that director getting salary from the company. Can Non-Executive director be given salary?
if any director getting salary, do we have to appoint him as Executive director?
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This is a common mistake which we all ignore.
Yes, Non – executive Director shall get only sitting fee and percentage in profit, if any. An Executive Director shall get salary (including taxable and non – taxable perquisites) and percentage of profit, if any.
Please, appoint him as executive director.
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Thanks Sir for reply
Sir just by filing DIR-12 and selecting option as Executive, he shall become Executive director or any other form also required now as per Companies Act 2013?
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Comply for Managerial Remuneration.
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For appointment of Executive Director, MR-1 form is required to be filed.
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Thanks Sir and Maam.
But pl clarify that its a private company. So if MR-1 Required but we are not appointing director as KMP. Just giving him salary
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In case of Private companies, MR – 1 is required to be filed as per Section 196.
In my view, only Section 197 and Schedule V is not applicable to private companies.
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Thanks Sir but if we dont want to appoint him as KMP,then also MR-1 required?
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Yes, MR – 1 under Section 196 as applicable to all companies.
It seems management keen not to disclose salary. Wait for exemption notification which may help you. Else you may workout some out of box professional approach.
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Thanks Sir
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We are a Pvt Ltd company. The Directors have drawn salary, the directors are in whole time employment but not designated as Whole time Director. We now want to change the designation of the directors to Whole time director at back date, say 23.03.2015.
Is form MGT 14 & MR-1 required?.
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I do not advise back – dated things.
yes, these forms are required in appointment or change of designation to WTDs.
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sir,
Thanks for your reply.
As per section 196, we will change the designation of director into WTD and for that we are required to file DIR-12 & MR-1. But as per sec-203 (Appointment of KMP) is not applicable for pvt. ltd. co.and so (sec-179, Rule -8 (2) of Cos (Meeting of Board & its Powers) Rules, to appoint or remove KMP is not applicable to us . Now MGT-14 is still required????
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While answering, I by guided by fact came out from query that change in designation was already happened on 23rd March 2015 pending compliance of form filing. Exemption Notification, now referred come in to force on 5th June 2015 and not earlier than that.
Please collect all your facts.
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Sir,
One thing that am still not able to understand that if we are not appointing a director as a KMP then why Mgt-14 (appointment or removal of KMP.) is required to be filed
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Debatable issue it is!!
My PERSONAL view is, all WTDs are KMP by virtue of Definition.
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Mr. Gahrana,
You have mentioned that while filing DIR-12 “interest in other entities” is mandatory to give only in case of Appointment, but MCA help file does not say anything on this. Can you please through some light on this?
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Is letter of appointment from the Nominating institution enough can be considered as letter of appointment in case of nominee director.
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Sir
Can a single member propose the candidature of more than one person for appointment of director.Pls suggest
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Dear Sir, As per Sec 152(7)(b)(iv) of Co.Act,13 – a director shall not be deemed to be reappointed— if a resolution, whether special or ordinary, is required for his appointment or re-appointment by virtue of any provisions of this Act. Unable to understand this point sir ?? Thanks sir…
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Section 152(7)(b)(iv) reads –
If at the adjourned meeting also, the vacancy of the retiring director is not filled up and that meeting also has not expressly resolved not to fill the vacancy, the retiring director shall be deemed to have been re-appointed at the adjourned meeting, unless a resolution, whether special or ordinary, is required for his appointment or re-appointment by virtue of any provisions of this Act.
A director shall be deemed to be appointed in a general meeting if a resolution NOT TO FILL that vacancy is NOT passed. It means, where vacancy is there and no other person appointed as director Retiring Director shall be treated as REAPPOINTED.
However, There must no requirement to fill that vacancy by passing a RESOLUTION ONLY.
Example: Presume, in case of independent director, the appointment of an independent director shall be approved by the company in general meeting by way of special resolution only. The deeming provision in 152(7)(b) should not apply. Section 152(7)(b)(iv) just clarify such position.
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