Procedure for appointment of Additional Director

Additional Director is a director who is appointed by Board of directors in the Board Meeting. Usually a director is appointed by shareholders in Annual General Meeting or Extra Ordinary General Meeting of the Company. But in case of additional director, the directors have authority to directly appoint him in board meeting on a condition that in upcoming Annual General Meeting or Extra Ordinary General Meeting additional director should be regularized in such meeting to normal designation of directorship by filling of form DIR-12 for his appointment. Sec 161 lays down procedure for appointment of additional director in private limited company.

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Key Factors after appointment of Additional Director

1. Appointment of director need to be authorized by company Article of Association (AOA)
2. Proposed director must apply for DSC & DIN
3. Proposed director is not disqualified to be appointed as director

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Regulatory Framework

The regulatory framework for appointment of additional director can be divided into two parts as under-

1. Sec 161 of the Companies Act, 2013

It deals with the provisions of appointment of additional director. It confers power on board of directors to appoint additional director in the Board Meeting.

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2. Articles of Association of the Company

Provisions related to appointment of additional director must be framed out in its Articles of Association of the company. It is the basic document containing set of rules and regulations for the company.

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What is Tenure of Additional Director in Company ?

Technically, an additional director confirms his appointment in the upcoming or ensuing Annual General Meeting or Extra ordinary General Meeting of the Company. So it can be said that tenure for additional director is valid only when his appointment is confirmed in the AGM or EOGM as the case may be.

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Regularization of additional director

If during the year any director is appointed by board as additional director, then he must be regularized to the designation of director in the ensuing annual general meeting or extra ordinary general meeting as the case may be. If in case the additional director is not regularized then his appointment by board shall not be valid. So regularization of director is the actual confirmation of appointment of director. After regularization, the same needs to be intimated to the Registrar of Companies (ROC) within 30 days from the date of Annual General Meeting or Extra Ordinary General Meeting in form DIR-12

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5 steps for Appointment of Additional Director

Procedure for appointment of Additional Director is just 5 steps away. By following these 5 steps you can easily appoint additional director of the company.

1.  Apply for DIN

DIN means Directors Identification Number. Proposed director intended to act as additional director, needs to apply for DIN first at www.mca.gov.in . Immediately DIN approval letter will be issued by Ministry of Corporate Affairs containing DIN number and other details.

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2. Apply DSC

For appointing as director DSC (Digital Signature Certificate) is required. It is an electronic signature used on behalf of physical signature. DSC is usually valid for 2 years. Class II DSC is expected to be applied by every person intending to act as director. DSC is of additional director required for filing DIR -12 form.

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3. Board Meeting

Before making an application for DIN, first a board meeting needs to be conducted. Hold a meeting of board of directors for getting an approval to appoint additional director pursuance to sec 161 of Companies Act, 2013. Once resolution is passed company must file DIR -12 on MCA site for appointment within 30 days. For filing DIR -12 after 30 days company need to pay additional filing fees.

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4.Extracts of minutes of board meeting

On conclusion of Board meeting, minutes of the meeting needs to be accorded by director of the company in the matter of appointment of Additional Director of the company.

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5.Filling of Form DIR-12

Once the proposal for appointment of Board of Directors is approved, the next step is filling of form DIR-12 within 30 days from the date of board meeting intimating ROC regarding such appointment. Filing DIR 12 is complete online process.

Documents

1. CTC of Board Meeting
2. Intimation of appointment by the company
3. Appointment letter
4. Acknowledgment by the company

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List of Documents for Appointment of additional Director

For appointment of additional director below list of documents required.

1. PAN of director
2. Aadhaar
3. Passport
4. Board Resolution for proposal of appointment
5. Latest Address proof such as Phone / Utility Bills / Bank Statement
6. DIR-2  (Consent of director)
7. Appointment letter
8. DIR -8

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Government Filing Fees for Appoint of Director

After filing DIR-12 on MCA site company need to pay Government Filing Fees for appointment of director.

1. Regular Filing Fees. Rs. 300/-

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Conclusion:

Additional Director cannot be said as any designation, but it can be regularized in the ensuing AGM or EOGM to its normal designation as “Director” Thus sec 161 confers on board to appoint a director in Board Meeting but the real designation is changed only after regularization. For appointment of additional director company AOA must authorize. The additional director have same duties and liabilities like any other regular director.

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