The following article is an clear cut explanation of Additional Director Meaning, Appointment of Additional Director along with Procedure for the Appointment Additional Director. Additional Director Means the articles of a company may confer on its Board of Directors the power to. appoint any person, other than a person who fails to get appointed as a director in a general. meeting, as an additional director at any time who shall hold office up to the date of the next.
Appointment of Additional Directors
Articles of a company may confer its Board of Director power to appoint Additional Director. A person failed to be appointed through general meeting shall not be appointed as Additional Director. An Additional Director may hold office only up to the date of next Annual General Meeting or the last day, on which the Annual General Meeting should have been held, whichever is earlier. [Section 161(1)].
However, the total number of directors and additional directors shall not exceed the maximum strength of directors fixed for the Board.
An additional director holds office only upto the date of the next annual general meeting of the company. If the annual general meeting of the company is not held or cannot be held, the person appointed as additional director vacates his office on the last day on which the annual general meeting should have been held in terms of Section 161 of the Act.
The composition of the Board of Directors is required to be in compliance with the conditions of clause 49 of the listing agreement, if applicable.
If an additional director, during his tenure as additional director of the company, had been appointed as managing director of the company, his appointment as managing director also ceases simultaneously with the termination of his directorship at the commencement of the annual general meeting. However, if such a person was elected as a full fledged director at the annual general meeting he will continue to be a director of the company and also as its managing director for the period for which his appointment as managing director had been made under Section 196 of the Companies Act, 2013.
Procedure for Appointment of Additional Director
Ensure that the Articles of the company authorise the Board to appoint an additional director and such appointment is within the maximum limit of directors mentioned in the Articles.
Ensure that individual proposed to be appointed as an additional director, does not suffer from any disqualification mentioned .
The Board shall appoint an additional director by passing a resolution either at a meeting or by circulation.
Before appointing a person as an additional director, his consent to act as director should be obtained.
Check whether the additional director to be appointed in the board meeting has obtained Director Identification Number (DIN). If not then ask such director to make application to Central Government for obtaining DIN and ensure that the Director has intimated his Directors Identification Number to the Company
Ensure that the consent of the director as well as the declaration from the director has been obtained.
Send notice in writing to all directors of the company in accordance with Section 173 of the Companies Act, 2013 for holding Board meeting.
Hold the Board meeting and pass resolution for appointment of an additional director.
The company has to file particulars of director in Form DIR – 12 with the Registrar of Companies within thirty days of the appointment after paying the requisite fee electronically
For the purpose of filing Form DIR – 12, the following attachments are required:
- Letter of appointment
- Consent letter of appointee director
- Ensure that said Form is digitally signed by managing director or manager or secretary of the company..
- The particulars of appointment of director should also be given to the stock exchange if the shares of the company are listed.
- The particulars of the director and other aspects of the director have to be entered by the company in the registers maintained under Sections 170 and 189
- After appointment the director concerned has to inform other companies in which he is director about his appointment.