Appointment of Director to Your Private Limited Company

A company is an artificial judicial person managed and run by natural persons known as directors. A company’s management is entrusted to its board of directors. Situations may arise where a company may be required to appoint more directors to its board from time to time based on the requirements of the business or company shareholders. A board of directors is a collective body of individual directors of a company.

However, the appointment of the directors must be according to the Companies Act, 2013 for it to be legally valid. This article covers how a director is appointed in a company, reasons for adding or changing directors and the documents required for director appointment.

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Who can be a company director?

Any individual above 21 years can be appointed as a director. However, an artificial person, such as a corporation, company, firm, association or entity, cannot be appointed as a director.

What are the eligibility criteria to be a company director?

The following are the eligibility criteria to become a director:

• The individual should be above 21 years
• The individual should not have an unsound mind
• The individual should not be an undischarged bankrupt or adjudged an insolvent
• The individual should not be sentenced by a court and convicted for more than six months

Adding a Director – Overview

A director is someone elected by the company shareholders to manage the company affairs as per the Memorandum of Association (MOA) and Articles of Association (AOA). The person wishing to be a director must have a Digital Signature Certificate (DSC) and Director Identification Number (DIN).

Any person above 21 years can become a director of a company. The AOA of a company should contain provisions for adding a director. The Companies Act, 2013 prescribes the procedure that a company must follow to add a new director. A private company should have a minimum of two directors at all times. However, the company can have a maximum of fifteen directors.

Why Add/Change Directors

1. Get new talent on the company board
2. Prevent dilution of ownership
3. The inefficiency of existing directors
4. Meeting the statutory limit

Documents Required to Appoint a Director

• PAN card of the director
• Identification proof, such as Voter ID, driving license, Aadhaar card, etc
• Proof of residence, such as utility bills, rental agreement, etc
• Passport size photograph