Appointing, Resigning and Removing a Director in India: Process, Forms and Deadlines

Boards change: a startup adds an investor's nominee, a co-founder steps back, an experienced hire joins as a director. Each change has its own approvals and a filing deadline with the Registrar of Companies, and getting them right protects both the company and the director. This guide covers the three main events: appointment, resignation and removal.

The Ground Rules for Any Board

• A private company needs at least two directors, a public company three, and a One Person Company one.
• At least one director must be resident in India, meaning they stayed in India for at least 182 days in the financial year.
• A company can have up to 15 directors, or more with a special resolution.
• A person can be a director of up to 20 companies, of which no more than 10 can be public companies.

Appointing a Director

Before the appointment

• The person needs a DIN, or applies for one through Form DIR-3, and a DSC.
• They give written consent to act as a director in Form DIR-2.
• They declare they aren't disqualified in Form DIR-8.

Ways to appoint

• Additional director: the board can appoint someone between AGMs, if the articles allow it. They hold office only until the next AGM, where shareholders must confirm the appointment.
• Appointment by shareholders: directly at a general meeting, by ordinary resolution.
• Nominee director: appointed under the articles or an agreement, often by an investor or lender.
• Casual vacancy: filled by the board when a director appointed at a general meeting leaves early, in some cases.

Filing

The company files DIR-12 with the ROC within 30 days of the appointment, attaching the director's consent and the resolution. The new director also gives the company a disclosure of their other interests in Form MBP-1 at the first board meeting they attend.

Resigning as a Director

A director can resign at any time by giving written notice to the company. No approval is needed. The resignation takes effect from the date the company receives the notice, or a later date the director specifies.

• The company notes the resignation at its next board meeting and files DIR-12 within 30 days.
• The director may also file Form DIR-11 with the ROC within 30 days, with a copy of the resignation letter. It's optional, but it puts the exit on record if the company doesn't file.
• A director who resigns remains liable for offences that happened while they were in office.

Watch the minimums

If a resignation takes the board below the minimum number of directors, or leaves it without a resident director, the company must appoint a replacement promptly. If every director resigns at once, the promoters have to appoint new directors.

Removing a Director

Shareholders can remove a director before their term ends under Section 169, by ordinary resolution at a general meeting. It's deliberately a formal process:

1. A shareholder gives special notice of the resolution to the company, at least 14 days before the meeting.
2. The company sends the notice to the director concerned, who has the right to be heard at the meeting and to make a written representation, which is circulated to members.
3. The shareholders vote on the resolution at the general meeting.
4. The company files DIR-12 within 30 days.

A director can also vacate office automatically, for example by becoming disqualified, or by missing every board meeting held over 12 months.

Common Mistakes

• Letting DIR-12 slip past 30 days, which adds fees that grow with the delay.
• Leaving a departed director on the MCA record, where they remain exposed to the company's defaults.
• Forgetting to regularise an additional director at the AGM, so their appointment lapses.
• Appointing someone whose DIN is deactivated, so they can't sign anything until their KYC is done.
• Not updating the bank's signatory list and the GST registration after a change.

Getting Help

Think Filing handles every step of director changes: DIN applications, consents and declarations, board and shareholder resolutions, DIR-12 and DIR-11 filings, and updating the records that follow.