Change in Directors of a Company
A company's board of directors plays a crucial role in decision-making and corporate governance. Whether adding a new director, removing an existing one, or changing their designation, proper compliance under the Companies Act, 2013 is essential. Non-compliance with director-related filings can lead to penalties and legal complications. At Advisorate, we simplify the process of changing directors while ensuring full legal compliance.
Types of Director Changes
Appointment of a New Director
When a company requires additional expertise or leadership, a new director can be appointed.
Resignation of a Director
A director may resign voluntarily or due to compliance reasons.
Removal of a Director
A director can be removed by the shareholders or the board as per legal provisions.
Change in Designation
A director's role may be changed, such as from Director to Managing Director or from Additional Director to Director.
Compliance & Filing Requirements
When making any changes to your company's directorship, there are several compliance requirements that must be fulfilled:
1. Board & Shareholder Approval
- Obtain board approval through a Board Resolution.
- If required, pass a Shareholder Resolution in a general meeting for confirmation.
2. Filing of DIR-12 with MCA
- Form DIR-12 must be filed with the Ministry of Corporate Affairs (MCA) within 30 days of the change.
- Attachments may include:
- Board Resolution / Shareholder Resolution
- Resignation letter (if applicable)
- DIR-2 (Consent to Act as Director)
- Interest disclosure (MBP-1)
3. Updating Statutory Registers & Disclosures
- Update the Register of Directors & Key Managerial Personnel (KMP).
- Disclose the change in the Director's Report and to regulatory authorities if applicable.
4. Resignation Process & Compliance
- The resigning director must file DIR-11 (optional but recommended) with MCA as proof of resignation.
- The company must file DIR-12 within 30 days of the resignation.
5. Removal of a Director
- A special notice under Section 169 of the Companies Act, 2013 is required.
- A general meeting must be conducted for shareholders' approval.
- DIR-12 must be filed within 30 days of removal.
Penalties for Non-Compliance
Failure to file DIR-12 or comply with director-related regulations can result in:
- Penalties up to ₹50,000 on the company and officers in default.
- Risk of disqualification of directors under Section 164 of the Companies Act, 2013.
- MCA restrictions on company filings due to non-compliance.
Director Change Process
Initial Assessment
We review your requirements and specific situation
Documentation
We prepare resolutions and required forms
Approval Process
Assistance with board and shareholder approvals
DIR-12 Filing
Electronic filing with the MCA
Register Updates
Updating statutory registers and documentation
Our Director Change Services
- Expert Assistance with seamless director transitions while complying with all legal requirements
- Timely Filing of DIR-12, board resolutions, and statutory updates
- Regulatory Compliance to avoid penalties and ensure adherence to MCA guidelines
- End-to-End Support from consultation to complete documentation