Sample Board Resolution for Change of Nominee Director
Overview : A Board Resolution for Change of Nominee Director is required when a financial institution, bank, or investor wishes to replace their existing representative on the company's Board with a new nominee. This comprehensive resolution addresses both the cessation of the outgoing nominee director and the appointment of the new nominee director in a single corporate action. The resolution ensures compliance with Section 161(3) read with Section 169 of the Companies Act, 2013, whilst maintaining the nominating institution's representation rights and safeguarding continuity in corporate governance.
CERTIFIED TRUE COPY OF THE RESOLUTION PASSED AT THE MEETING OF THE BOARD OF DIRECTORS OF ____________ [COMPANY NAME] HELD ON ____________ [DATE] AT ____________ [TIME] AT ____________ [MEETING VENUE/REGISTERED OFFICE ADDRESS]
RESOLVED THAT the Board of Directors hereby acknowledges receipt of the communication dated ____________ [Date] from ____________ [Financial Institution/Bank/Investor Name] ("Nominating Institution") intimating the withdrawal of the nomination of Mr./Ms. ____________ [Outgoing Nominee Director Name], holding DIN ____________ [Director Identification Number], as their nominee director on the Board of the Company and the simultaneous nomination of Mr./Ms. ____________ [New Nominee Director Name], aged ____________ [Age] years, holding DIN ____________ [Director Identification Number], as the new nominee director to represent the interests of the Nominating Institution.
RESOLVED FURTHER THAT pursuant to the provisions of Section 161(3) of the Companies Act, 2013, and in accordance with the terms and conditions of the ____________ [Loan Agreement/Investment Agreement/Shareholders Agreement] dated ____________ [Agreement Date] executed between the Company and the Nominating Institution, the Board hereby accepts the withdrawal of nomination of Mr./Ms. ____________ [Outgoing Nominee Director Name] and records his/her cessation as Nominee Director of the Company with effect from ____________ [Cessation Date], and expresses its appreciation for the valuable services rendered by him/her during his/her tenure as Nominee Director.
RESOLVED FURTHER THAT pursuant to the provisions of Section 161(3) of the Companies Act, 2013, and the Articles of Association of the Company, Mr./Ms. ____________ [New Nominee Director Name], who has signified his/her consent in Form DIR-2 to act as a Director of the Company and has furnished declaration in Form DIR-8 under Section 164 of the Companies Act, 2013, be and is hereby appointed as a Nominee Director of ____________ [Company Name] with effect from ____________ [Appointment Date] to represent the interests of the Nominating Institution on the Board of Directors.
RESOLVED FURTHER THAT the Board hereby acknowledges and records that the appointment of the new Nominee Director is made in pursuance of the nomination rights conferred upon ____________ [Nominating Institution Name] under the aforesaid agreement and that the said Nominee Director shall represent the interests of the nominating institution on the Board of Directors whilst fulfilling his/her fiduciary duties as a Director of the Company in accordance with the Companies Act, 2013.
RESOLVED FURTHER THAT the tenure of the new Nominee Director shall be co-terminus with the subsistence of the agreement with the nominating institution or until such time as the nominating institution withdraws the nomination or nominates another person in his/her place, whichever is earlier, and that the Nominee Director shall not be liable to retire by rotation under Section 152 of the Companies Act, 2013.
RESOLVED FURTHER THAT any Director of the Company or the Company Secretary be and is hereby severally authorised to execute the letter of appointment with the new Nominee Director acknowledging the terms of nomination and the rights and obligations arising therefrom, file Form DIR-11 for cessation of the outgoing nominee director and Form DIR-12 for appointment of the new nominee director along with requisite documents and fees with the Registrar of Companies, ____________ [State], within thirty days of the passing of this resolution, intimate the change in nominee directorship to all relevant stakeholders, maintain appropriate entries in the Register of Directors and Key Managerial Personnel, ensure compliance with all applicable provisions of the Companies Act, 2013 and rules made thereunder, and to do all such acts, deeds, matters and things as may be necessary, proper, desirable or expedient to give effect to this resolution.
RESOLVED FURTHER THAT the Board places on record its acknowledgement of the expertise and experience that ____________ [New Nominee Director Name] brings to the Company in his/her capacity as the representative of ____________ [Nominating Institution Name] and looks forward to the valuable contributions in furthering the Company's objectives whilst safeguarding the interests of the nominating institution.
Relevant Legal Provision for Change of Nominee Director
The change of nominee director is governed by Section 161(3) of the Companies Act, 2013, which empowers the Board of Directors to appoint any person as a director nominated by any institution in pursuance of any law or agreement or by the Central Government or State Government by virtue of shareholding in a Government company. This provision facilitates the replacement of nominee directors when the nominating institution decides to change its representative, whilst maintaining its nomination rights. The cessation of the outgoing nominee director occurs automatically upon withdrawal of nomination by the nominating institution, as the appointment is intrinsically linked to the institutional nomination.
Section 149(7) of the Companies Act, 2013 defines a nominee director as one appointed to represent the interests of any person in pursuance of any agreement or law. The change in nominee director does not require shareholder approval through a general meeting, as it stems from the contractual rights of the nominating institution. However, the Board must ensure proper documentation of both cessation and appointment to maintain corporate records and comply with regulatory filing requirements under the Companies Act, 2013.
Setindiabiz Services:
Setindiabiz provides comprehensive change of nominee director services, ensuring seamless transition and regulatory compliance under the Companies Act 2013. Our expert team assists with coordinating between companies and nominating institutions, drafting professional board resolutions for both cessation and appointment, preparation and filing of mandatory forms including DIR-11 and DIR-12, obtaining necessary consents and declarations from new nominee directors, and providing ongoing compliance support throughout the transition process. Visit https://www.setindiabiz.com/director-appointment for detailed information about our director change and compliance services.
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Setindiabiz Editorial Team is a multidisciplinary collective of Chartered Accountants, Company Secretaries, and Advocates offering authoritative insights on India’s regulatory and business landscape. With decades of experience in compliance, taxation, and advisory, they empower entrepreneurs and enterprises to make informed decisions.