TAXAJ

Change in Stakeholder/Director/Partner

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 affairs of the company 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 can be required for a company from time to time based on the requirements of the shareholders of the business.


This plan includes the following as well:

  1. Addition of Director in a Private Limited Company
  2. Removal/Resignation of a Director from a Private Limited Company
  3. Addition of a Partner in a Limited Liability Partnership
  4. Removal/Resignation of a Partner from a Limited Liability Partnership
  5. Addition/Resignation of a Partner in a Partnership Firm
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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.

Created by potrace 1.15, written by Peter Selinger 2001-2017

Timeline

It Usually takes 2 to 4 working days.

Buy Now
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/LLP that want to appoint/remove director(s).
  • Companies that need assistance in quickly completing the director/partner 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

  1. Name, Contact Number and Email Id of all the Stakeholders.

  2. Directors Identification Number, if already.

  3. Self Attested PAN, Aadhar & Passport size photo of all the Stakeholders.

  4. Apostilled Passport, Mobile Bill and other KYC docs in case of NRI Stakeholder.

  5. Specimen Signatures of all Stakeholders.

  6. New Shareholding pattern (50:50 or 60:40) between the Stakeholders.

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 a Director who, by virtue of Articles of Association of a Company or an agreement with the company or a resolution passed in its general meeting, or by its Board of Directors, is entrusted with substantial powers of management of affairs of the company.

Ordinary Director

An “Ordinary Director” means a simple Director who attends the Board meetings of a company and participate in the matters put before the Board of Directors. These Directors are neither whole-time Directors or Managing Directors.

Additional Director

An Additional Director is someone appointed by the Board of Directors between two annual general meetings subject to the provisions of the Articles of Association of a Company. Additional Directors shall hold office only upto the date of the next annual general meeting of the Company. 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 pecuniary interest in the company are called Professional Directors. In large companies, Professionals are sometimes appointment to the Board to utilise their expertise in the management of the Company.

Executive Director

An Executive Director or whole-time Director is someone in full-time employment of the company.

Nominee Director

Banks and Private Equity investors who grant debt or equity assistance to a company generally impose a condition as in appointment of their representative on the Board of the concerned Company. These nominated persons are called as nominee Director. In a One Person Company (OPC), a nominee Director is someone nominated by the sole Director of the One Person Company to take over affairs of the OPC in case of death or incapacitation of 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 a period of not less than three months from India. Generally, alternate Directors are appointed for a person who is Non-Resident Indian (NRI) or for foreign collaborators of a company.

What is a Director Identification Number?

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.

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

The DIN directory contains all information regarding the directors, such as their name, PAN number and also their present address. Any change in the address or other information needs to be updated immediately.

What are the conditions/eligibility to be a director ?

Director of a company is a person elected by the shareholders for managing the affairs of the company 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 can be required for a company from time to time based on the requirements of the shareholders of the business.

To appoint a director, the person proposing to become a Director must obtain a digital signature certificate (DSC) and director identification number (DIN). DIN can be obtained for any person who is above the age of 18. The nationality or residency status of the DIN applicant does not matters. Hence, Indian Nationals, Non-Resident Indians and Foreign Nationals can obtain DIN and be appointed as Director 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 Board of a 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. 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 act through human beings, and it is the Directors through whom mainly the company acts. Therefore, the management of a company is entrusted to a body of persons called “Board of Directors”.

Another definition of a Director is someone who administers, controls or directs something, especially a member of a commercial company; one who supervises, controls or manages; a person elected by the shareholders of a company to direct company’s policies; person appointed or elected according to law, authorised to manage and direct the affairs of a company.

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 (One Person Company) Private Limited Company  Limited Company
 Minimum 1 DirectorMinimum 2 Director  Minimum 3 Director

What is the Residency requirement for a Director ?

There is nothing in the Companies Act, 2013 that prohibits the appointment of any person who is a foreigner or NRI as a Director of a Company. However, Section 149(3) provides that 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.

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

One of the common requisites in the various laws ordained involves providing the defendant or defaulter with an opportunity of being heard. It is no different with the removal of a director. The process of removal cannot not be initiated without providing this opportunity to the director who is to be removed.

Issue of Notice

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

Notice to members

A copy of the notice must be sent to the director concerned, who in-turn is entitled to be heard on the resolution at the meeting, whether or not the director is a member of a company. The notice must be served at-least seven days, which is a week prior to the date of meeting. Alternatively, if the shareholders are unable to deliver the notice due to any reasonable circumstances, 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. Similar to the issuance of copy to the directors, the notice must be posted on the website at-least seven days prior to the date of meeting.

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 make a plea to the company that the representation must be sent to all the members. Also, the members must be notified of the representation through a notice. If the company is unable to send the copies to all the members, the director may request for the representation to be read out at the meeting. The director is entitled to this right in addition to and without prejudice to his right to be heard orally.

Notice to members

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