Directors are appointed to manage the affairs of the company, to meet with the company law compliances, income tax compliances and other business operations. A private limited company must have a minimum of 2 and maximum of 50 directors.

Appointment

• The appointment of a new director must comply with the company’s Articles of Association;
• First Directors of the company is appointed by either subscribers of the Memorandum (if the Articles so provide), or in the absence of any such clause, the subscriber to the Memorandum of Association (MOA), who are individuals will be first directors of the Company till the appointment of directors in the general meeting;
• Appointment of subsequent directors is made at annual general meeting of the company subject to any regulation by articles;
• An ordinary resolution by simple majority is to be passed, unless otherwise stated.

Company Law Compliances

The person so appointed is required to file his consent in E-Form 32 within 30 days of his appointment with the requisite fees. The E – Form must be digitally signed by either the managing director, manager or secretary of the company authorized to do so.

Penalty for Non – Compliance

The director so appointed should notify about his appointment to other companies where he is already a director, managing director, manager or secretary within twenty days. If the director fails to do so, he will be punishable with a fine of Rs.5000.

Removal of directors

A director of a company can be removed by

• Shareholders at the general meeting
• Retirement by rotation, as provided by the Articles
• The Court – this happens in special cases and not in normal circumstances.

Taxmantra.com will assist you in all Business Incorporation & Maintenance issues including Creation of LLPs, Companies etc and also in post incorporation issues such as assistance in other registrations, ROC Compliances and others.