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The Directors are the person who controls the day today affairs of the Company on behalf of the Promoters/Shareholders. As per Section 2(34), of the Companies Act, 2013, “director” means a director appointed to the Board of a company. They are the person who are appointed by the shareholders in the Company.
Section 152 (2) of the Act, states that “Save as otherwise expressly provided in this Act, every director shall be appointed by the company in general meeting”. This implies that there are certain exception when Directors can be appointed by the Board. In case of emergency and urgency, it may not be possible to conduct general meeting at a shorter notice. Therefore the power may be delegated to the Board through the articles of the Company to appoint directors of the Company on behalf of the shareholders.Pursuant to the provision of Section 161 of the Companies Act, 2013, the Board of Directors of the Company can appoint the following directors:
  • – Additional Director
  • – Alternate Director
  • – Nominee Director and
  • – Casual Vacancy

Additional Director
Additional Director is a Director appointed by the Board of Directors who shall hold office upto the forth coming of Annual General Meeting or on the last day on which AGM should have been held. He is called additional director because he is a person holding the position of Director without the approval of shareholders. His appointment is valid till the AGM and in case no AGM held, till the last day on which AGM should have been held.

Alternate Director
Alternate Director is appointed in place of an existing director during his absence for a period not less than 3 months in India. Such alternate director shall vacate the office either when the original director returns to India or till the duration for which original director was appointed, whichever is earlier. In case of any automatic re-appointment of retiring director,shall apply only to the original director.
A person can be appointed as an alternate director only if he is not holding an directorship in the same Company or holding position of alternate director in any other company. The Companies (Amendment) Act, 2017 w.e.f 09.02.18, inserted this new disqualification that any existing Director of the Company shall not be appointed as the alternate director. No person shall be eligible to be appointed as alternate director in place of an independent director unless he qualifies to become an independent director of the Company.

Nominee Director
Nominee Director is appointed by Board only if nominated by
  • – Central Government/ State Government by virtue of their shareholding in Government Company;
  • – Any institution as per provision of any law for the time being in force or of any agreement.
Further a Nominee director shall not considered as Independent Director as he has financial interest in the Company.

Appointment in case of Casual Vacancy
Casual vacancy arise when the office of the director, appointed by the shareholders, is vacated due to death, resignation, disqualification, insolvency etc.
If the office of Director who is appointed in General Meeting is vacated before expiry of the term for which he was appointed in the normal course of business, may be filled by the Board. The Director appointed in such case shall hold office only up to the term for which the director would held the office in whose place the casual vacancy arose and shall be subsequently approved by the Members in General Meeting.
The Companies (Amendment) Act, 2017 bought two major changes relating to appointment of Director in casual vacancy:
1. It removed the word in Public Company in the clause indicating that casual vacancy of director arises not only in Public Company and
2. Further, it inserted a clause that such appointment shall be approved by the members in the immediate next general meeting.
The amendment clauses are in effect from 09.02.2018.
Procedure to appoint director
The Procedure to appoint a director can be divided into 3 phase:
1. Pre Board Meeting procedure
2. Conduct of Board Meeting
3. Post Board Meeting Compliances

1. The very first step is to check the Articles of the Company through which power to appoint Directors has been delegated to the Board.
2. Check the candidature of the person proposed to be appointed and does not suffer from any disqualification.
3. Obtain his consent in Form DIR-2 and also he has been allotted a valid DIN.
4. Issue notice at least 7 days prior the date of Board meeting. However, Board meeting may be held at a shorter notice provided consent has been received from director before meeting.
5. Circulate agenda items to be discussed alongwith candidature of the proposed director.

1. Ensure that the Chairman takes the Chair within 15 minutes of the scheduled time. If the Company does not have a Chairman or Chairman fails to arrive within time, the Board may appoint any other person as the Chairman of the Meeting.
2. Ensure proper quorum is present in the meeting.
3. Leave of absence to be given to the Directors who could not attend the meeting.
4. Pass resolution for appointment of Director
5. Discuss all other agenda items and close the meeting with vote of thanks.

1. Prepare and circulate minutes of the meeting as per Secretarial standards.
2. File for DIR-12with ROC within 30 days of appointment and make the payment.

The power to appoint directors on the Board of the Company by the Board of Directors is a super power delegated by the Shareholders. This power is a sign of trust bestowed on the Board by the Shareholders. The Board need to be cautious and practical while using this power.
Further in case of any assistance or clarification, please feel free to contact us at complianceship@gmail.com and +91-8010233173

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