Under Section 161(1) of the Companies Act 2013 read with rule 8, 9 and 14 of the Companies (Appointment and Qualification of Directors) Rules, 2014 and other provisions of Companies Act 2013 accompanied with Board of Directors of a Company, if authorized by the Articles of Association may appoint an additional director, such Additional Director was required to be regularized in General meeting by shareholders through passing an Ordinary resolution.

If the Board of Directors needs one more director to be appointed in the company due to any reason and neither can wait till the upcoming AGM nor want to hold an EGM, then Board can appoint an additional director. Disclosures by a Woman Director of her Interest… click here to know more

The term for Additional Director

A person who has been appointed as an additional director can occupy their post until the Annual General Meeting will take place. If the Annual General Meeting will not take place, their term of appointment will come to an end on the date on which the annual general meeting should have been held.

Competencies and Obligations

An additional director will have the same powers as other directors, even if he is appointed on a temporary basis. Moreover, additional directors are vested with all Competencies and Obligations of a director. Additional Directors can be appointed as a permanent director at the Annual General Meeting. The additional director must practice his competencies for the welfare of the company and the shareholders.

Know more about the procedure for adding or removing Director.

Limit on Number of Directors

• The company cannot have more than 15 directors. So pass a special resolution in case the number of directors including proposed additional director will exceed.
• The declaration should be made the additional director of his appointment to all other companies in which he is already a director in any other company.
• No additional director can be appointed whose resolution for appointment is rejected by the shareholders in a general meeting, Board is not authorized for the same as well.

Method of Appointment

• Board Meeting should be held.
• Then, Pass the board resolution for the appointment of Additional Director.
• The individual who will be appointed as an additional director must have an Active DIN, otherwise, apply in DIR-3.

Additional Director should produce the following documents-

DIR-2 – Consent to act as a Director

DIR-8- Intimation by Director to the effect that he/she is not disqualified.

  • Within 30 days from passing Board, Resolution DIR-12 should be filed with Registrar of Companies. Following documents should be attached.
  • Signed Board Resolution
  • DIR-2 by Additional Director

Now this person will be Additional Director Till AGM of the company. If the company want to appoint him as a director then regularize the person as director in General Meeting by Shareholder Resolution. File form DIR-12 for Change in Designation of Director along with the ordinary resolution.

 

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Summary
Appointment of Additinal Director - Companies Act 2013
Article Name
Appointment of Additinal Director - Companies Act 2013
Description
If the Board of Directors needs one more director to be appointed in the company due to any reason and neither can wait till the upcoming AGM nor want to hold an EGM, then Board can appoint an additional director.