FAQ on Adding/Removing a Director to a Company

1.How many Directors are required in Private Limited Company?

A minimum of two directors are required to establish a private limited company and the maximum amount cannot exceed beyond fifteen.

2.How many directors are needed in a OPC?

To start a One Person Company you need a minimum of One director and the maximum number of directors a company can have is up to 15.

3.Who is a Director?

A Director is a natural person who runs the different affairs of the Company being an active member of the same. A Director is needed as Company is a legal entity which does not have a physical presence. A Director can have any name. They are the professionals appointed to direct and manage Company affairs. They are of fundamental importance obtaining a pivotal position in the structure of the company.

4.What Responsibilities do the Company Directors have?

According to the Companies Act there are certain duties to be done by the Directors, these general management duties may include:

• Important decision making that will in a way benefit the company and its owners, and also consulting the creditors/shareholders before taking any decision.
• Keeping a high check on the maintenance of the Company details with the Company House and the MCA/HMRC.
• It is very important to carry out proper financing records during service period.
• It is also the duty of the Director to monitor/supervise the financial position of the company.
• Annual accounts, Annual returns, and Company Tax Returns are to be readily filled within the given deadlines by the Directors.
• It is also the responsibility of the Director to pay the corporation tax and any other tax liabilities by the given deadlines.
• Organizing the General Meetings and Board Meetings.
• Filing copies of resolutions with Companies House.
• Appointment of important professionals are also the duty of the Director which includes appointing solicitors, accountants and auditors, if required.
• All the members(shareholders) must be provided with the Annual Account.
• Directors are required to Issue and transfer shares to the creditors.
• Complying with employment law if the company has employees.
• Appointing a company secretary, if required.

5.Who appoints the Director?

The shareholders of the company appoint Director of the Company for the management of Company Affair.

6.When can we add/appoint a Director?

The Board of Directors elects a New Directors when there is a vacancy in the position and it may also be if the company wishes to add directors to the existing Board.

7.When do Vacancies arise on the board?

The Vacancy of Director occurs in a Company in following cases;

• If an existing Director resigns or dies
• In case a Director ceases to hold the office, authority or designation in the company
• A vacancy arises when the Director is removed from the Company

8.How is the Director appointed?

There is an appropriate procedure to appoint a Director in the Company;

• The company nominates every director in general meeting.
• At the time of appointment of a Director, the DIN(Director Identification Number) is compulsory for the same.
• DIR-2, which includes consent to act as a Director of a Company, is filed by every director before the appointment in the Company. This is the agreement wherein it mentions about the authority of the Director to hold the office.
• Within 30days of the appointment the Company must file Form DIR-12, specifications of the election of directors and KMP along with the form DIR-2. The prescribed fee needs to be paid as well.

9.How is a Director removed from a Company?

A company can eliminate a director before the expiry of the term of his office. This isn't a one-day decision. A Director is given reasonable opportunities of being heard after passing the ordinary resolution. The Company however cannot remove the director appointed by National Company Law Tribunal u/s 242.

10.What is Director Identification Number(DIN)?

Director identification number is the unique number that is issued to existing Director or a Future Director of a Company. It is required to be submitted during the procedure for company registration. It is denoted as DIN. The DIN can be interchangeably used with the Designated Partner Identification Number(DPIN). For registering an LLP (Limited Liability Partnership) in India, DPIN is needed. All the personal information of the person assigned as directed are recorded in DIN. The foreigners and NRI also can obtain a DIN by submitting the identity and address proof. But firstly DSC(Digital Signature Certificate) must be obtained to get DIN(Director Identification Number).

11. What is the minimum eligibility criteria to be a Director of a Company?

In order to become a Director of Company, the requirements are as followed;

• The minimum age of the person needs to be at least 18 years
• The person must have a DIN(Director Identification Number)
• A Foreign Nationals is also permitted to be Directors of an Indian Company.

12.Can a Foreign National be Director of an Indian Company?

Yes, a foreign national can be a Director of an Indian Company but all the documents submitted must be notarized by the authorized legal professionals.

13. What are the documents required from the Director of the Company?

• PAN Card or Passport(Foreigners & NRI)
• Voter ID/Passport/Driving License
• As address proof either bank Statement/Phone Bill/Electricity Bill/Gas Bill
• Passport-size photo
• Specimen Signature(directors signature only)
• Notarized Rental Agreement
• No-objection Certificate
• In case of owned property a copy of Sale Deed/property Deed

Also, make sure to carry atleast 2-4 copies of each document and all the Documents should be in English.