Appointment of a Director

Eligibility 
   • The individual must have a valid DIN (Director Identification Number) or DPIN (Designated Partner Identification Number for LLPs). 
             o If the DIN is deactivated (e.g., due to non-filing of DIR-3 KYC), it must be reactivated before appointment (refer to my previous response for reactivation steps).
             o If the individual doesn’t have a DIN, they must apply for one using Form DIR-3.
   • Must not be disqualified under Section 164 of the Companies Act, 2013 (e.g., bankrupt, convicted, or non-compliant with filings).
   • For companies: Maximum 15 directors (private/public companies); can be increased with a special resolution.
   • For LLPs: Minimum 2 designated partners; no upper limit.

Process for Appointment

1. Obtain/Verify DIN:  
           o If the appointee doesn’t have a DIN, file Form DIR-3 with: 
                      o Identity proof (PAN for Indians, passport for foreigners).
                      o Address proof (e.g., Aadhaar, utility bill).
                      o Passport-sized photo.
                      o Digital Signature Certificate (DSC) of the applicant.
                      o Fee: ₹500 (approx.).
           o If the DIN is deactivated, reactivate it by filing DIR-3 KYC e-Form with a ₹5,000 penalty (as detailed in my previous response).
2. Board Resolution: 
              o Convene a Board Meeting to approve the appointment.
              o Pass a resolution recommending the appointment of the new director (or designated partner for LLPs).
              o For private companies, ensure compliance with the Articles of Association (AoA).
3. Shareholder Approval (if required): 
              o For public companies or additional directors: Hold an Extraordinary General Meeting (EGM) or Annual General Meeting (AGM) to pass an ordinary resolution for appointment (unless appointed as an additional director, who must be regularized at the next AGM).
              o For LLPs: Update the LLP Agreement to reflect the new designated partner.
4. File Form DIR-12 (for Companies): 
              o File Form DIR-12 with the MCA within 30 days of the board resolution to notify the appointment.
              o Documents required:
                      o Board resolution copy.
                      o Consent letter from the director (Form DIR-2).
                      o Declaration of non-disqualification (Form DIR-8).
                      o Appointment letter issued by the company.
                      o For foreign nationals: Notarized/apostilled identity and address proofs.
                      o DSC of the new director and a signing director of the company.
                      o Certification by a practicing CA/CS/CMA.
5. File Form LLP-3/LLP-12 (for LLPs): 
               o For LLPs, update the LLP Agreement and file Form LLP-3 (for agreement changes) and Form LLP-12 (for partner appointment) within 30 days.
               o Documents:
                      o Revised LLP Agreement.
                      o Consent letter from the designated partner.
                      o Identity and address proofs.
                      o DSC of the new partner and an existing designated partner.
6. DIR-3 KYC Compliance: 
               o The new director/partner must file DIR-3 KYC by September 30 of the financial year in which the DIN was allotted or next year if allotted after March 31.
               o Example: A DIN allotted on October 15, 2025, requires KYC filing by September 30, 2026.
               o If the DIN was reactivated for this appointment, ensure KYC is filed for the current year to keep it active.
7. Update MCA Records: 
               o Upon approval of DIR-12 or LLP-12, the MCA updates the company/LLP’s director details.
               o Check status using the Service Request Number (SRN) on the MCA portal.

Resignation of a Director

Process for Resignation

1. Submit Resignation Letter: 
             o The director submits a resignation letter to the company’s board, specifying the effective date.
             o The letter should be addressed to the Board of Directors and signed.

2. Board Acceptance:  
             o Convene a Board Meeting to accept the resignation.
             o Pass a resolution acknowledging the resignation.
3. File Form DIR-11 (by the Director): 
             o The resigning director must file Form DIR-11 within 30 days of resignation to notify the MCA.
             o Documents:
                      o Resignation letter.
                      o Proof of dispatch to the company (e.g., courier receipt).
                      o DSC of the resigning director.
4. File Form DIR-12 (by the Company): 
             o The company must file Form DIR-12 within 30 days of resignation to update MCA records.
             o Documents:
                      o Resignation letter.
                      o Board resolution accepting the resignation.
                      o DSC of a signing director and certification by a CA/CS/CMA.
5. For LLPs: 
             o File Form LLP-12 within 30 days to notify the cessation of a designated partner.
             o Update the LLP Agreement via Form LLP-3 if needed.
6. DIR-3 KYC Compliance: 
             o Even after resignation, the DIN remains active, and the individual must file DIR-3 KYC annually by September 30 to avoid deactivation.
             o If the DIN was deactivated prior to resignation, reactivate it using the process outlined in my previous response (₹5,000 penalty).

Key Notes

    • The company is responsible for filing DIR-12, but if it fails to do so, the resigning director’s DIR-11 filing serves as evidence of resignation. 
    • Non-compliance by the company may attract penalties under Section 159 (for companies) or LLP Act provisions.

Removal of a Director

Grounds for Removal
    • Disqualification under Section 164 (e.g., non-filing of financials, bankruptcy, conviction). 
    • Failure to attend board meetings for 12 months (automatic vacation under Section 167).
    • Breach of duties or shareholder decision.

Process for Removal

1. Board Resolution:  
             o Convene a Board Meeting to propose the removal.
             o Issue a notice to the director with reasons for removal, giving them an opportunity to be heard (mandatory under Section 169).
2. Shareholder Resolution: 
             o Hold an EGM to pass a special resolution (75% majority) for removal (not required for automatic vacation under Section 167).
             o File Form MGT-14 within 30 days of the resolution for public companies.
3. File Form DIR-12: 
             o File Form DIR-12 within 30 days to notify the MCA of the director’s cessation.
             o Documents:
                      o Board and EGM resolutions.
                      o Notice issued to the director.
                      o Proof of communication (if any).
                      o DSC of a signing director and CA/CS/CMA certification.
4. For LLPs: 
             o Remove a designated partner as per the LLP Agreement and file Form LLP-12 within 30 days.
5. DIR-3 KYC: 
             o The removed director must continue filing DIR-3 KYC annually to keep their DIN active for future use.

Change in Director Details

    • If the change involves personal details (e.g., name, address, email, mobile), file DIR-3 KYC e-Form to update MCA records. 
    • For mobile/email updates post-annual KYC filing, a ₹500 fee applies (as per August 1, 2024 amendment).
    • For significant changes (e.g., name correction due to marriage), file Form DIR-6 with: 
             o Proof of change (e.g., marriage certificate, gazette notification).
             o Updated identity/address proofs.
             o DSC and professional certification.
    • Ensure the DIN is active (reactivate if needed, as per my previous response).

Recommendations

    •  Check DIN Status: Before any change, verify the DIN status on the MCA portal to confirm if reactivation is needed. 
    •  Timely Filing: Adhere to the 30-day timeline for DIR-12/LLP-12 to avoid penalties.
    •  Annual KYC: File DIR-3 KYC by September 30 each year to prevent deactivation issues during director changes.
    •  Professional Assistance: For complex cases (e.g., foreign directors, reactivated DINs), consult a professional to avoid rejections due to document mismatches or DSC issues.
    •  MCA Updates: Check www.mca.gov.in for notifications, as rules may change (e.g., fee updates in 2024).