Change in Stakeholder/Director/Partner

A stakeholder of a Company or LLP is a person directly or indirectly related to the Company/LLP. Here, we shall be using the term mainly for Director or Partner of a Company or LLP, respectively. Director is, however, a person elected by the shareholders for managing the company's affairs as per the Memorandum of Association and Articles of Association of the company. Since a company is an artificial judicial person created by law, it can only act through the agency of natural persons. Thus, only living persons can be Directors of a company and the management of a company is entrusted to the Board of Directors. Appointment of Directors is required from time to time based on the requirements of the shareholders of the business.

This plan includes the following as well:

Addition of Director in a Private Limited Company
Removal/Resignation of a Director from a Private Limited Company

About This Plan

While appointing/removing a director for your company, you will need to adhere to a few procedures in accordance to the Government. TAXAJ experts will help you in the same.

Timeline

It Usually takes 2 to 4 working days.

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Services Covered

Who Should Buy

How It's Done

Documents Required

Services Covered

Obtain Digital Signature for new director
Obtain DIN for new director
Drafting of director appointment letter , Disclosure of interest, Board Resolution
Filing of DIR-12

Who Should Buy

Companies that want to appoint/remove director(s).
Companies that need assistance in quickly completing the director change process with perfection

How It's Done

Purchase the plan
Provide details required for obtaining the Digital Signature and DIN
Receive DIN and Digital signature
Get secretarial services to draft director appointment letter, resignation letter, disclosure, resolutions
TAXAJ files DIR 11 & DIR-12 on your behalf

Documents Required

Name, Contact Number and Email Id of all the Stakeholders.
Directors Identification Number, if already.
Self Attested PAN, Aadhar & Passport size photo of all the Stakeholders.
Apostilled Passport, Mobile Bill and other KYC docs in case of NRI Stakeholder.
Specimen Signatures of all Stakeholders.
New Shareholding pattern (50:50 or 60:40) between the Stakeholders.

Everything about changing a Partner, Director or Members explained in this video!

Frequently Asked Questions:

How many types of Director are there in a company?

The following are the types of Director in Company:

Managing Director

A “Managing Director” means Director who, by Articles of Association of a Company, is designated to this post. An MD can also be appointed by an agreement or a resolution passed in its general meeting. The Board of Directors of a company can also choose an MD entrusted with substantial powers of management of affairs company.

Ordinary Director

An "Ordinary Director" is a Director who attends a company's board meetings and participates in the matters put before the Board of Directors. These Directors are neither whole-time Directors nor Managing Directors.

Additional Director

An Additional Director is someone appointed by the Board of Directors between two annual general meetings subject to the Articles of Association of a Company. Additional Directors shall hold office only up to the date of the next annual general meeting of the Company. The number of Directors and additional Directors of a company together shall not exceed the maximum strength fixed for the Board of Directors by the Articles of Association.

Professional Director

Any Director possessing professional qualifications and do not have any financial interest in the Company are called Professional Directors. In large companies, Professionals are sometimes appointed to the Board to utilise their expertise in the management of the Company.

Executive Director

An Executive Director (ED) is someone in full-time employment with the company. Sometimes also known as a whole-time Director.

Nominee Director

Banks and Private Equity investors who grant debt or equity assistance to a company generally impose a condition as in the appointment of their representative on the Board of the concerned Company. These nominated persons are called nominee Directors. In an OPC, a nominee Director is nominated by the sole Director to take over the affairs in case of death or incapacitation of the sole Director.

Alternate Director

Alternate Director is someone appointed by the Board of Directors in a general meeting to act for a Director called the “original director” during his absence for not less than three months from India. Generally, alternate Directors are appointed for a person who is a Non-Resident Indian (NRI) or for foreign collaborators of a company.

What is a Director Identification Number?

Obtaining DIN has been made mandatory as earlier people would incorporate companies such as chit funds, raise money from people, and cheat people. Now Ministry keeps the DIN database to map all the people who hold director positions in any company.

Director Identification Number (DIN) is an 8-digit Unique Identification Number allotted to all existing and new directors. It is a mandatory requirement, and without DIN, no person can become a director. The DIN directory contains all information regarding the directors, such as their name, PAN number, and present address. Any change in the address or other information needs to be updated immediately.

Is there any limit on the number of Directors in a Company ?

Only an Individual (living person) can be appointed as a Director in a Company.

A body corporate or business entity cannot be appointed as a Director in a Company.

A company can have a maximum of fifteen Directors – it can be increased further by passing a special resolution.

Minimum Number of Director in Company are as follows:

OPC	Pvt Ltd Company	Limited Company
Minimum 1 Director	Minimum 2 Director	Minimum 3 Director

What is the Residency requirement for a Director ?

Absolutely nothing is mentioned in the Companies Act, 2013 that prohibits any foreigner or NRI as a Director of a Company. However, Section 149(3) provides that. There is no residency requirement mentioned, but every company shall have at least one director who has stayed in India for a total period of not less than one hundred and eighty-two days in the previous calendar year.

What are the conditions/eligibility to be a director ?

The Director of a company is a person elected by the shareholders for managing the company's affairs as per the Memorandum of Association and Articles of Association of the company. Since a company is an artificial judicial person created by law, it can only act through the agency of natural persons. Thus, only living persons can be Directors of a company and the management of a company is entrusted to the Board of Directors. Appointment of Directors is required from time to time based on the requirements of the shareholders of the business.

To appoint a director, the person must have a DSC & DIN, i.e. digital signature certificate and director identification number. Both of these can be obtained for any Individual above the age of 18. The nationality or residency status of the DSC & DIN applicant does not matters. Hence, Indian Nationals, Non-Resident Indians and Foreign Nationals can obtain DIN and be appointed as directors of a company in India.

What does a Director in a Private Limited Company mean ?

Companies Act, 2013 defines the term "Director" as someone appointment to the company's board. The Board of Directors means a group of those individuals elected by the shareholders of a company to manage the company's affairs. Since a company is an artificial legal person created by law, it is necessary to act only through the agency of natural persons. It can only work through human beings, and it is the Directors through whom mainly the company operates. Therefore, a company's management is entrusted to a body of persons called the "Board of Directors".

Another meaning of Director is who administers, controls or directs something, especially a commercial company member. A person who supervises, controls or manages a commercial establishment formed by an act of parliament. A person elected by the company's shareholders to direct the company's policies; a person appointed or elected according to law authorised to manage and control the affairs of a company.

Information

A company is empowered to remove its directors before the expiry of their term, the powers of which is vested with the shareholders. This article deals with the process of removal of directors in a company. Non-compliance with any of the stipulated processes can make the decision void, if appealed in a court.

What is the process to remove a Director?

Basic Prerequisite

The most common requirements in the laws ordained involve providing the defendant or defaulter with an opportunity of being heard. It is no different with the removal of a director. The director must present his side before initiating the removal process.

Issue of Notice

The process of removal gets initiated by way of a notice served to contain the agenda. This notice must be processed by shareholders holding a minimum voting power of 1%; or who owns shares on which an aggregate sum of not more than Rs 5,00,000 has been paid upon the date of the notice. Such a notice, known as a special notice, must be signed by all the members. The special note must be delivered to the company at least 14 days before the meeting date, resolved. It may be delivered earlier but wouldn’t be valid if issued before three months of the meeting date.

Notice to members

The Director who is entitled to be heard at the meeting should be sent a Notice copy. Director concerned must also be sent a notice, whether or not he is a company member. The notice must be served to the Director a week before the meeting date. Alternatively, suppose the shareholders cannot deliver the notice due to any reasonable circumstances. In that case, it can be published in two newspapers, one in English and the other in the regional language. In addition to this, the notice must mandatorily be posted on the company’s website, if it maintains any. A Notice copy must also be posted on the website seven days before the meeting date.

Representation in writing

The concerned director can make a representation in writing to the company against the notice of removal. He/she is also entitled to plea to the company to send the representation to all the members. Also, the members must be notified of the representation through a notice. If the company cannot send copies to all the members, the director may request that the representation be read out at the meeting. The director is entitled to rights in addition to and without prejudice to his right to be heard orally.

Notice to members

Suppose the organisation or any aggrieved person decides against sending the representation to the members or reading it out in a meeting. In that case, they can apply to the Tribunal, requesting a nullification of the process. Further, the director is also bestowed with the right to issue an order demanding the director cover the cost of application borne by the company. The Tribunal is entitled to annul the process if it finds that the director uses this right to secure unnecessary publicity for the defamatory matter.