Appointment Of Director – Corporate Compliance Under Companies Act, 2013
Appointment of Director is a critical corporate compliance requirement governed by the Companies Act, 2013. Every company is legally required to ensure that the appointment of director is carried out through proper approvals, resolutions, documentation, and timely ROC filings.
At My Legal Business LLP, we provide end-to-end Appointment of Director services, ensuring legal correctness, procedural compliance, and smooth execution without delays or penalties.
Legal Framework Governing Appointment Of Director
The Appointment of Director is regulated by the following laws and documents:-
- Companies Act, 2013
- Applicable Rules issued by the Ministry of Corporate Affairs (MCA)
- Articles of Association (AOA) of the Company
Every appointment of director must strictly comply with these provisions to be legally valid.
Eligibility Criteria For Appointment Of Director
A person is eligible for Appointment of Director if he or she:
Is not disqualified under Section 164 of the Companies Act, 2013
Holds a valid Director Identification Number (DIN) or applies for it
Has given written consent to act as director
Complies with limits on the number of directorships
Eligibility verification is the foundation of a valid appointment of director.
Types Of Appointment Of Director & Approvals Required
| S.NO. | Director | Approval required | Key points |
|---|---|---|---|
| 1 | Additional Director | Board Resolution | Holds office till the next AGM or date on which AGM should have been held. |
| 2 | Executive Director / Whole-Time Director |
• Ordinary Resolution by Shareholders • Board Resolution |
Approval of appointment terms and remuneration. |
| 3 | Managing Director |
• Board Resolution • Ordinary Resolution by Shareholders |
Tenure-Maximum 5 years at a time. |
| 4 | Independent Director |
• Board Resolution • Ordinary Resolution by Shareholders Approvals & Resolutions Required for Re-Appointment ✔ Board Resolution ✔ Special Resolution by Shareholders |
Declaration of independence under Section 149(7). |
| 5 | Nominee Director |
• Board Resolution • Shareholders’ Resolution (if required by AOA or agreement) |
Appointed by Financial institutions, banks, or investors. |
Process Of Appointment Of Director
Preliminary Review & Eligibility Check for Appointment of director
- Review of Articles of Association (AOA) to confirm power to appoint director
- Check maximum number of directors allowed
- Eligibility verification under Section 164 (Disqualifications)
DIN & DSC for Appointment of director
- Application for Director Identification Number (DIN), if not available
- Procurement of Digital Signature Certificate (DSC)
DIN and DSC are mandatory before appointment.
Consent & Statutory Disclosures for Appointment of director
- Consent to act as director (Form DIR-2)
- Disclosure of interest (Form MBP-1)
- Declaration of non-disqualification
These documents are required before passing resolutions.
Board Meeting & Board Resolution for Appointment of director
- Convening of Board Meeting
- Passing of Board Resolution for appointment
- Approval for calling General Meeting (if shareholders’ approval is required)
- Authorisation for ROC filing
Board approval is compulsory in all director appointments.
Shareholders’ Approval for Appointment of director
- Issuance of General Meeting notice
- Passing of Ordinary Resolution by members
- Approval of appointment terms
Required for Managing Director, Executive Director, Independent Director.
ROC Filing for Appointment of director – Form DIR-12
Timeline: Within 30 Days of Appointment
- Filing of Form DIR-12 with Registrar of Companies
- Attachment of resolutions, consent, and declarations
Delay attracts additional fees and penalties.
Post-Appointment Compliance
Timeline: Same Day After ROC Filing
- Updating statutory registers
- Issuance of appointment letter
- Updating company records and disclosures
Documents & Information Required For Appointment Of Director
Self-Attested Pan Card
Self-Attested Aadhaar Card / Passport
Address Proof
Photograph
DIN (if available)
DSC of the person being appointed as director
E mail – ID
Mobile Number
% of shareholding in other companies in which having position of director
Note - DSC of the authorised signatory of the company is required.
Important Compliance Notes For Appointment Of Director
- DIN must be obtained before appointment
- Board Resolution is mandatory in all cases
- Shareholders’ approval depends on the type of director
- DIR-12 filing is compulsory for legal validity
Penalty For Late Filing Of Form DIR-12 For Appointment Of Director
As per the Companies Act, 2013, Form DIR-12 must be filed within 30 days from the date of appointment of director.
Delay in filing attracts additional fees, which increase based on the period of delay.
Additional Fee Structure for DIR-12
| Period of Delay | Additional Fee Payable |
|---|---|
| Up to 30 days | 2 times of normal filing fee |
| 31 to 60 days | 4 times of normal filing fee |
| 61 to 90 days | 6 times of normal filing fee |
| 91 to 180 days | 10 times of normal filing fee |
| Beyond 180 days | 12 times of normal filing fee |
Normal filing fee depends on the authorised share capital of the company.
Important Notes On Penalty For Appointment Of Director
- Additional fee is mandatory and non-waivable
- Delay may lead to non-compliance status on MCA records
- Continuous default can attract penalty proceedings under the Companies Act
- Timely filing avoids unnecessary financial and compliance risks
Why Timely DIR-12 Filing Is Crucial For Appointment Of Director
- Ensures legal validity of appointment of director
- Keeps MCA records updated
- Avoids additional government fees
- Maintains good corporate compliance track record
Resignation Of Director
Resignation of Director is a statutory process governed by Section 168 of the Companies Act, 2013. A director may resign from the office by giving a written notice to the company, and the company must ensure timely ROC compliance to avoid penalties and future liabilities.
At My Legal Business LLP, we provide end-to-end Resignation of Director services, ensuring proper documentation, accurate ROC filings, and complete statutory compliance.
Legal Framework Governing Resignation Of Director
- Section 168 of the Companies Act, 2013
- Relevant MCA Rules and prescribed forms
- Articles of Association (AOA) of the Company
The Resignation of Director is governed by:
Every resignation of director must comply with these provisions to be legally valid.
When Can A Director Resign?
- Personal or professional reasons
- Change in management or ownership
- Statutory or regulatory restrictions
- Non-alignment with company policies or vision
A Resignation of Director may take place due to:
The law allows resignation of director at any time, subject to compliance requirements.
Effect Of Resignation Of Director
- The resignation of director takes effect from:
- The date on which the resignation notice is received by the company, or
- The date specified in the resignation letter, whichever is later
The resigning director remains liable for acts and omissions during the tenure as director
Process Of Resignation Of Director
Submission of Resignation Letter
- Director submits a written resignation letter to the company
- Effective date of resignation (if any) is clearly mentioned
This is the first and most important step in resignation of director.
Board Meeting for Resignation of Director
- Board Meeting is convened
- Board takes note of the resignation of director
- Board Resolution is passed
- Authorisation is given for ROC filing
ROC Filing by Company – Form DIR-12
Timeline: Within 30 days of resignation of director
- Company files Form DIR-12 with Registrar of Companies
- Attachments include:
- Resignation letter
- Certified copy of Board Resolution
Delay in filing DIR-12 leads to additional fees and penalties.
ROC Filing by Director – Form DIR-11 (Optional but Recommended)
Timeline: Within 30 days of resignation of director
- Resigning director may file Form DIR-11
- Direct intimation of resignation of director to ROC
Filing DIR-11 protects the director from future liabilities and non-compliance risks.
Post-Resignation Compliance
- Updating statutory registers
- Updating internal company records
- Intimation to banks and authorities, if applicable
Documents Required For Resignation Of Director
Resignation Letter
Self-attested PAN Card of Director
DIN details
Board Resolution
DSC of the authorised signatory of the company
Penalty For Late Filing Of DIR-12 For Resignation Of Director
Form DIR-12 must be filed within 30 days from the date of resignation of director.
Additional Fee Structure
| Period of Delay | Additional Fee |
|---|---|
| Up to 30 days | 2 × Normal fee |
| 31–60 days | 4 × Normal fee |
| 61–90 days | 6 × Normal fee |
| 91–180 days | 10 × Normal fee |
| Beyond 180 days | 12 × Normal fee |
Normal filing fee depends on the authorised share capital of the company.
Important Notes On Resignation Of Director Compliance
- Additional fee is mandatory and non-waivable
- Delay reflects non-compliance on MCA records
- Non-filing may expose directors to future legal liabilities
- Timely resignation of director compliance ensures clean exit
Why Choose My Legal Business LLP For Appointment/Resignation Of Director Services?
- CS-handled documentation
- Accurate & timely ROC filings
- Protection from future liabilities
- Transparent pricing
- Complete MCA documentation & filings
- Error-free process
- Dedicated support till completion
FAQs – Appointment/Resignation of Director
Is DIN mandatory for appointment of a director?
Yes. A valid Director Identification Number (DIN) is compulsory and must be obtained before a person can be appointed as a director.
Can DIN be applied for after the appointment of a director?
No. DIN must be obtained prior to appointment, as appointment without DIN is not legally valid.
Is a Board Resolution compulsory in all cases of director appointment?
Yes. Passing a Board Resolution is mandatory for every director appointment, irrespective of the type of director.
Is shareholders’ approval required for appointment of all directors?
No. Shareholders’ approval depends on the category of director being appointed, such as Managing Director or Independent Director.
What is Form DIR-12?
Form DIR-12 is filed with the Registrar of Companies (ROC) to intimate the appointment of a director along with supporting documents.
What is the due date for filing Form DIR-12?
Form DIR-12 must be filed within 30 days from the date of appointment to avoid penalties.
Can a company appoint more than one director at the same time?
Yes. A company may appoint multiple directors in one meeting, subject to statutory limits under the Companies Act.
Can a foreign national be appointed as a director in an Indian company?
Yes. A foreign national can be appointed as a director, provided all DIN, DSC, and regulatory compliances are fulfilled.
Is AGM approval mandatory for continuation of an Additional Director?
Yes. An Additional Director must be regularised by shareholders’ approval at the AGM, failing which the office becomes vacant.
What happens if Form DIR-12 is filed after the due date?
Late filing of DIR-12 attracts additional fees and penalties as prescribed by the MCA.
Is amendment of Articles of Association (AOA) required for appointment of director?
AOA amendment is required only if the existing AOA does not authorise the proposed appointment.
Can a director be appointed without any remuneration?
Yes. A director may be appointed without remuneration, unless restricted by the Companies Act or company policy.
How many directors can a company appoint?
The number of directors depends on the limits prescribed under the Companies Act, 2013 and the company’s AOA.
Is issuing an appointment letter mandatory for directors?
Yes. Issuing an appointment letter is considered good corporate governance practice and is required for proper records.
Who is authorised to sign Form DIR-12?
Form DIR-12 must be digitally signed by a director or authorised signatory of the company using a valid DSC.
Is Board approval required for resignation of a director?
No. As per Section 168 of the Companies Act, 2013, a director can resign by giving written notice to the company. The Board is not required to approve the resignation; it only takes note of the resignation in a Board Meeting.
What is Form DIR-12?
Form DIR-12 is an ROC filing made by the company to intimate the Registrar of Companies about the resignation of a director, along with the date of cessation and supporting documents.
Is Form DIR-11 mandatory for the resigning director?
No. Filing of Form DIR-11 by the resigning director is optional, but it is strongly recommended as it serves as an independent intimation to ROC and protects the director from future liabilities.
What is the effective date of resignation of a director?
The resignation becomes effective from the date on which the company receives the resignation letter or from the date specified in the resignation letter, whichever is later.
Who is responsible for filing Form DIR-12?
The company is responsible for filing Form DIR-12 with the ROC within the prescribed timeline.
Who files Form DIR-11?
Form DIR-11, if filed, is submitted by the resigning director personally to the ROC.
What is the due date for filing Form DIR-12?
Form DIR-12 must be filed within 30 days from the effective date of resignation.
What happens if Form DIR-12 is filed after the due date?
Late filing of DIR-12 attracts additional fees as prescribed by MCA, which increase based on the period of delay. Continuous default may also lead to non-compliance status.
Can a director withdraw his or her resignation?
Yes. A director may withdraw the resignation before it becomes effective, subject to the consent of the company and Board noting.
Is acceptance of resignation by the Board compulsory?
No. Acceptance is not required under law. The Board only needs to take note of the resignation and record it in the Board Meeting minutes.
Does a director’s liability continue after resignation?
Yes. A director remains liable for all acts, omissions, and decisions made during the period of directorship, even after resignation.
Can a director resign without a Board Meeting?
No. Although the resignation is effective upon receipt, the company must convene a Board Meeting to take note of the resignation and authorise ROC filing.
Can a Managing Director or Whole-Time Director resign?
Yes. A Managing Director or Whole-Time Director may resign, subject to the terms of appointment, employment agreement, and Companies Act provisions.
Is the Articles of Association (AOA) relevant in case of resignation?
Generally, no. Resignation is governed by the Companies Act, 2013. However, AOA may contain procedural requirements, which should be reviewed.
Is ROC filing mandatory for resignation of director?
Yes. Filing of Form DIR-12 with ROC is mandatory for giving legal effect to the resignation and updating MCA records.