Appointment of Director

What is Appointment of Director?

Director is an individual who directs, manages, oversees or controls the affairs of the Company.
He is a person appointed to the Board of a company to perform the duties and functions of a company in accordance with the provisions of The Company Act, 2013.
Director of a company is a natural person elected by the shareholders as per the Memorandum of Association and Articles of Association of the company.
The Board of Directors means a group of those individuals elected by the shareholders of a company to manage the affairs of the company.

Minimum number of director based on the type of the company:

Type of company

One Person Company

Private Limited Company

Public Limited Company

No. of Director required

Necessity / Reasons of appointing an additional Director in a company:

The following are the circumstances in which Addition / Appointment of a Director would be necessary:

When there is sudden death or plans of retirement / resignantion or other personal reasons, if the existing Directors are unable to work for a long time, in such cases appointing an additional director is necessary to meet the statutory limit of the company.
For the growth of business, it is necessary to hire new talent in the management of the company.
In case where there is new product line or department added in the company, then to lead the team, appointing an expert as a director is necessary.
When the specified statutory number of directors reduces, then it is mandatory for a company to appoint a new director.
To help the shareholders assign more operational responsibilities without losing any strategic control.

Eligibility criteria for a person to be appointed as director in a company:

The person appointed must be eligible as per the relevant clauses in the Articles of Association.
The proposed individual must be above the age of 18 i.e. a major.
He or she must qualify as per the laws mentioned under the Companies Act, 2013.
The Members of the Board must consent to the appointment of the proposed individual in which he seeks to get appointed as director.
It must be noted that the Companies Act does not mention any educational qualification in order to be eligible to become a Director.
Indian National, Non-Resident Indians, and Foreign Nationals can be appointed as a director in India.

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