How to change director in pvt ltd company | Step by Step Process

  • Setindiabiz Team
  • June 11, 2024
How to change director in pvt ltd company | Step by Step Process

If you are looking for a stepwise process of how to change director in pvt ltd company, the further post can be the best fit. As we all know, changing directors in company is a kind of exercise that a company needs to perform so that no operations of the company are affected or boosting its operations smoothly. Changing director name in company is subject to MOA conditions and also provisions of the Companies Act 2013. Navigate the company director change process in this post and gain insight into how to change director in pvt ltd company.

BRIEF SUMMARY
In a company, directors are appointed to take complete charge of operations and management in a company. Simply put, directors of a company hold key managerial positions in an organization and are responsible for managing the execution of overall day-to-day operations and affairs that can help meet the company’s final goal along with making profit and enhancing its goodwill across the industry.
Changing a company director in a private limited company may include either removing a director, or appointing a new director to the Board of Directors (BD) of the company. If we talk about the governing law, the appointment and resignation of directors are governed as per the provisions mentioned under the Companies Act 2013 and rules made thereunder. In this post, you will gain knowledge about how to change directors in a pvt ltd company in a step-by-step process.

Directors: Definition & Meaning

Section 2 (13) of the Companies Act 1956 states that a director is any person exercising the operations/functions of the company. The Article of Association (AOA) outlines the provisions for their appointment, duties, retirement rights, and also remuneration.

Considerables before initiating change in directors

Before initiating change of directors in a private limited company, several points should be kept in mind. The major ones are listed below;
  • The minimum number of directors is two. 
  • A maximum of 15 directors are allowed. 
  • Every appointed Director must have a Director Identification Number (DIN). 
  • Foreign Directors appointment is also allowed.
  • Any director removed formally from the board must secure an opportunity to be heard. 
  • Any director who is resigning from the company must submit his letter of resignation to the board of directors. Within 30 days of resignation, it is necessary to file Form DIR-11 to the ROC by the director.
Adhering to these checkpoints before changing directors in a private limited company ensures hassle-free and quick processing of change in directors.

Step-by-Step Process of Change of Director in a Company

In order to change directors in a private limited company, certain steps need to be followed. The step-by-step process to change director in a company is described below;

Step 1: Apply DIN

Director Identification Number (DIN) is necessary for the directors of a company if they are proposed to or appointed as a director in a company.

Step 2: Hold Meeting of Board of Directors

In case of a change of director in a company, a board meeting must be held. The board members must consent to the appointment, resignation or removal of a director in the company.

Step 3: Hold a General Meeting

A General Meeting must be held seeking consent of the majority of the board members for changing directors in the company.

Step 4: File Form DIR 12

Within 30 days of appointment of a new director, Form DIR-12 is required to be submitted as per Section 152 (5) of the Companies Act, 2013 with Rule 9 of the Companies (Appointment & Qualification of Directors) Rules, 2014.

Step 5: Resignation from the Director's Position

A director of the company is free to resign from the company anytime after giving a notice of intimation to the company. The company is required to intimate to the Registrar of Companies within 30 days from the date of Resignation in Form DIR-12.

Step 6: File Form DIR 11

The next step is to file Form DIR-11 to the Registrar of Companies for intimating the resignation of the director.

Step 7: Hold a Board Meeting

Finally, a board meeting is needed to be held to officially accept the resignation of the director from his directorship of the company.
This is how following the aforementioned step-by-step process can help fulfill the crucial task of company director change without any hassle and that too within a quicker time span.

Director change in company is an indispensable part of company structure. There may be several factors behind it such as poor management of company operations by the director, resignation of director, change in lifespan of director like death, etc.
Adding or removing director (s) in a private limited company can be done easily by adhering to the terms outlined in the company’s MOA (Memorandum of Association) as well as provisions specified for change of director in the Companies Act 2013. Go through this post deeply to gain insights into how to change director in pvt ltd company.

Conclusion

FAQs

Q1: Who can be appointed as a director of the company?

Any individual who is over 21 years old can be appointed as a company director. However, any artificial entity; be it a corporation, company firm, association, cannot be appointed as a director.

Q2: What documents are required to change directors in a company?

The documents required to change of director in company are listed below; 

  • Letter of Consent in Form DIR-2 
  • Appointment Letter 
  • Interest in other entities 
  • Proof of Identity and Residence 
  • CTC of Resolution Passed                     

A few other documents also may be required depending upon the reason for initiating the process of change of director in a company.

Q3: What forms are essential to file for adding a new director to a company?

In order to add or appoint a new director to the company, the forms that must be filed are MGT-14, DIR-2, and DIR-12. These forms consist of different information, clauses, and conditions required for legally appointing a new director to the company.

Q4: What are the rights of the director who is about to be removed from the company?

The concerned director has a right to be heard at the meeting. He may give a representation in writing and also make a request to notify it to the other members. The director may also request for the representation to be read out at the meeting.

Q5: How long will it take to appoint a new director in the company?

Once the resolution is passed for the appointment of an individual as director and also the DIN is obtained, typically it takes one day to appoint him/her as the company director.

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