Appointment of directors

[163. Notwithstanding anything contained in this Act, the articles of a company may provide for the appointment of not less than two-thirds of the total number of the directors of a company in accordance with the principle of proportional representation, whether by the single transferable vote or by a system of cumulative voting or otherwise and such appointments may be made once in every three years and casual vacancies of such directors shall be filled as provided in sub-section (4)
Appointment of Additional Director, Alternate Director and Nominee Director
(1) The articles of a company may confer on its Board of Directors the power to appoint any person, other than a person who fails to get appointed as a director in a general meeting, as an additional director at any time who shall hold office up to the date of the next annual general meeting or the last date on which the annual general meeting should have been held, whichever is earlier.
*(2) The Board of Directors of a company may, if so authorized by its articles or by a resolution passed by the company in general meeting, appoint a person, not being a person holding any alternate directorship for any other director in the company [or holding directorship in the same company], to act as an alternate director for a director during his absence for a period of not less than three months from India:
Provided that no person shall be appointed as an alternate director for an independent director unless he is qualified to be appointed as an independent director under the provisions of this Act:
Provided further that an alternate director shall not hold office for a period longer than that permissible to the director in whose place he has been appointed and shall vacate the office if and when the director in whose place he has been appointed returns to India
Provided also that if the term of office of the original director is determined before he so returns to India, any provision for the automatic re-appointment of retiring directors in default of another appointment shall apply to the original, and not to the alternate director.
[(3) 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.]
(4) [Omitted] if the office of any director appointed by the company in general meeting is vacated before his term of office expires in the normal course, the resulting casual vacancy may, in default of and subject to any regulations in the articles of the company, be filled by the Board of Directors at a meeting of the Board [which shall be subsequently approved by members in the immediate next general meeting]
Provided that any person so appointed shall hold office only up to the date up to which the director in whose place he is appointed would have held office if it had not been vacated.
To appoint not less than two thirds of the total number of directors according to the principle of proportional representation.
(2) A special notice shall be required of any resolution, to remove a director under this section, or to appoint somebody in place of a director so removed, at the meeting at which he is removed.
(3) On receipt of notice of a resolution to remove a director under this section, the company shall forthwith send a copy thereof to the director concerned, and the director,
whether or not he is a member of the company, shall be entitled to be heard on the resolution at the meeting.
*(4) Where notice has been given of a resolution to remove a director under this section and the director concerned makes with respect thereto representation in writing to the company and requests its notification to members of the company, the company shall, if the time permits it to do so,—
(a) in any notice of the resolution given to members of the company, state the fact of the representation having been made; and
(b) send a copy of the representation to every member of the company to whom notice of the meeting is sent (whether before or after receipt of the representation by the company), and if a copy of the representation is not sent as aforesaid due to insufficient time or for the company’s default, the director may without prejudice to his right to be heard orally require that the representation shall be read out at the meeting:
Provided that copy of the representation need not be sent out and the representation need not be read out at the meeting if, on the application either of the company or of any other person who claims to be aggrieved, the Tribunal is satisfied that the rights conferred by this sub-section are being abused to secure needless publicity for defamatory matter; and the Tribunal may order the company’s costs on the application to be paid in whole or in part by the director notwithstanding that he is not a party to it.
(5) A vacancy created by the removal of a director under this section may, if he had been appointed by the company in general meeting or by the Board, be filled by the appointment of another director in his place at the meeting at which he is removed, provided special notice of the intended appointment has been given under sub-section (2).
(6) A director so appointed shall hold office till the date up to which his predecessor would have held office if he had not been removed.
(7) If the vacancy is not filled under sub-section (5), it may be filled as a casual vacancy in accordance with the provisions of this Act:
Provided that the director who was removed from office shall not be re-appointed as a director by the Board of Directors.
(8) Nothing in this section shall be taken—
(a) as depriving a person removed under this section of any compensation or damages payable to him in respect of the termination of his appointment as director as per the terms of contract or terms of his appointment as director, or of any other appointment terminating with that as director; or
(b) as derogating from any power to remove a director under other provisions of this Act.

Any person intending to become a director is an existing company shall have make to appointment in eForm Dir-3. Follow procedure to fill the eForm:-

1. Supporting documents:-

Attach the photograph and scanned copy of new director of a company. I.e. proof of identity of applicant, proof of residence of applicant as per the guidelines. Physical documents are not submitted to apply for DIN application.

2. Digital signature:-

Form DIR-3 is mandatory to signed by the applicant and shall be verified digitally by a company secretary in full time employment of the company or by a managing director or director or CEO or CFO of the existing company in which the applicant is intended to be appointed as a director.

3. Fee payment:-

Upon upload. Make the payment for filling fee the form DIR-3. Only electronic payment of fees shall be allowed (i.e. net banking, credit card/ debit card/pay later/ Neft).
The user is required to get him / herself registered on the MCA21 Portal to obtain Login ID. Login to the MCA21 portal and click on 'eForm upload' link available under the 'eForms' tab for uploading the eForm DIR- 3.

4. Generation of DIN:-

Upon upload and successful payment, in case Form DIR-3 details have not been identified as potential duplicate, Approved DIN shall be generated and if the details have been identified as potential duplicate, Provisional DIN shall be generated.

Resignation of a director:-

1. DIN no. is available for resigning director of the company
2. date of appointment is also be maintained eform DIR-11
3. designation & category of the resignation director
4. Reasons for resignation of director is also maintained the eForm DIR-11

Supporting documents:-

• Attach the notice of resignation filed with company, proof of dispatch of resignation director as per the guidelines.

Digital Signature:-

• Form DIR-11 is mandatory is signed by the resignation director and shall be verified digitally by a company secretary in full time employment of the company or by a managing director or director or CEO or CFO of the existing company in which the applicant is intended to be appointed as a director.

A single e- form DIR-12 can be submitted for appointment of a new director and resignation of existing director or the change in designation of existing director only. eForm is submitted within 30 days from date of appointment as well as the resignation date f director.
While filing DIR-12, company is required to furnish following information:

1. Existing/New Company
2. Corporation Identification Number (CIN)
3. Name, Address and Email ID of the company will auto-populate based on CIN
4. Number of Managing directors for which form is being filed (Details of maximum 15 directors can be entered through one DIR-12. If number of directors for which DIR-12 is to be filed is more than 15 then a separate form is required to filed for remaining directors)
5. Details of each director for which form is filed:
6. Director’s Identification Number (“DIN”)
7. Name, Father’s name, address, nationality and Date of birth of director will auto-populate based on DIN
8. Appointment/ Cessation/ Change in Designation
9. Designation
10. Date of appointment/ change/ cessation
11. Interest in other entities is required to be entered in case of appointment only
12. Number of manager(s), secretary(s), Chief financial Officer or Chief Executive Officer for which the form is being filed. (Details of maximum 4 persons can be filed through one form. If form is required to be file for more than 4 persons then a separate form should be filed)
13. Details of manager(s), secretary(s), Chief Financial Officer or Chief Executive Officer of the company

Documents required to be attach to DIR-12
Document should be attach to DIR-12 depends on the nature of activity for which DIR-12 being filled. i.e., appointment/ resignation/ change the designation.
Documents to be attached in case of resignation/cessation