The appointment of a director is an important decision for any company, as it can have a significant impact on its operations and overall success. In order to appoint a director, a company must follow certain procedures and obtain the necessary resolutions. In this blog, we will discuss the types of Resolutions required for the appointment of a director.
Resolution Types for Appointment of Director:
- Ordinary Resolution: An ordinary resolution is the most common type of resolution required for the appointment of a director. It is a resolution passed by a simple majority of shareholders (i.e., more than 50%) present and voting at a general meeting. An ordinary resolution is required for the appointment of a director who is not a managing director or whole-time director.
- Special Resolution: A special resolution is required for the appointment of a managing director or whole-time director. It is a resolution passed by at least 75% of shareholders present and voting at a general meeting. A special resolution is also required for the appointment of a director who is not a resident in India.
- Unanimous Consent: In certain cases, a company may appoint a director by unanimous consent. This means that all shareholders must agree to the appointment of the director, and no formal resolution is required. Unanimous consent can be used for the appointment of a director who is already a director in another company within the same group, or for the appointment of a nominee director of a financial institution.
- Board Resolution: A board resolution is a resolution passed by the board of directors of a company. It is required for the appointment of an additional director, who is appointed by the board between two annual general meetings. A board resolution can also be used to appoint a director in an emergency situation, where a general meeting cannot be called in a timely manner.
Procedure for Appointment of Director:
In addition to obtaining the necessary resolutions, a company must also follow certain procedures for the appointment of a director. These procedures include:
- Obtaining a Digital Signature Certificate (DSC) and Director Identification Number (DIN) for the proposed director.
- Conducting a board meeting to approve the appointment of the proposed director and to obtain their consent to act as a director.
- Filing Form DIR-12 with the Registrar of Companies (ROC) within 30 days of the appointment.
- Updating the company’s records, including its register of directors and key managerial personnel, and filing the necessary documents with the ROC.
Conclusion:
In conclusion, the appointment of a director requires the company to follow certain procedures and obtain the necessary resolutions. The type of resolution required depends on the nature of the appointment and the status of the proposed director. In addition to obtaining the necessary resolutions, the company must also follow certain procedures for the appointment of a director, including obtaining a DSC and DIN for the proposed director, conducting a board meeting, filing Form DIR-12, and updating its records. It is important for companies to ensure that they follow all of these procedures and obtain the necessary resolutions to ensure that the appointment of the director is valid and legally enforceable.