Appointment Resignation of Director

APPOINTMENT OF DIRECTOR IN A COMPANY

Any change in the Board of Directors of a company should be compliant as per the provisions given in the Companies Act of 2013, the Articles of association of the company, and also as per any agreement, if any. Again, the need for changing director in a company must be duly justified and approved by the shareholders of the company. Here it may be noted that making a change in director means either removing a director from the Board or appointing a new director to the Board as an additional director. The section below deals separately with the procedure for change in directors of a private or public limited company in India.

For making appointment of a new director concerned is the Section 160 of the Indian Companies Act of 2013, while the Section 168 is relevant for getting resignation/removal of a director from the Board of a company.

• The Board of directors can appoint additional directors, if such power is conferred on them by the articles of association. Regulation 66 of Table F authorizes the Board to appoint the additional directors. The number of directors and additional directors together shall not at any time exceed maximum strength fixed for the Board by the articles. Such additional directors hold office only up to-
  (a) the date of next annual general meeting; or
  (b) the last date on which the annual general meeting should have been held,
  whichever is earlier

• Section 161(2) of the Act empowers the Board, if so authorized by its articles or by a resolution passed by the company in general meeting, to appoint a director (termed as ‘alternate director) to act in the absence of a original director during his absence for a period of not less than three months from India.
• Subject to the articles of a company, the Board may appoint any person as a director nominated by any institution in pursuance of the provisions of any law for the time being in force or of any agreement or by the Central Government or the State Government by virtue of its shareholding in a Government Company. The main objective of appointment of a nominee director is to ensure that borrower company complies with all legal requirements under various laws. In other words, nominee directors are watchdogs of the financial institutions to safeguard their investments
• A ‘casual vacancy’ means any vacancy occurring by reason of death, resignation, disqualification, removal or for any other reason other than retirement or expiry of tenure of office of a director. In simple words, if the office of a director comes to an end otherwise than in the normal course, such vacancy is called as a casual vacancy.