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Additional Director Appointment under Companies Act, 2013

Any Individual can be appointed as an Additional Director by a company under Companies Act, 2013-section 161. If the Board of Directors(BOD) needs one more director to be appointed in company because of any reason and neither can wait till the upcoming AGM nor want to hold an EGM, then Board of Directors can appoint an additional director.

For additional director appointment, the AoA (articles of association) must contain a provision authorizing the board of directors to appoint an additional director. A director cannot be appointed as an additional director if his/her resolution proposing him/her as a director was not passed by the shareholders in earlier general meeting. The resolution can also be passed before AGM by passing a resolution in an EGM aka extra ordinary general meeting. If the resolution is not passed by the shareholders, he/she shall terminate from his directorship with immediate effect.

The term of appointment of an additional director shall be till the next AGM (Annual General Meeting) or the last date on which such AGM should have been held. Companies Act, 2013-Section 161 endow power to the Board of directors appoint a new director to the Board of Directors. The director who is appointed by the Board of Directors of the Company under company act is called as Additional Director.

Requirements for Appointment of Additional Director

DSC (Digital Signature Certificate)

The Director need to have a valid Digital Signature Certificate (DSC) issued by the Certifying Authority in India.

DIN (Director identification Number)

The Director must have a Valid Director Identification Number (DIN) issued by the Certifying Authority in India.

Qualification of a Director

There is no certain educational qualification to become a director. But the proposed director need to get appointed as a director in the same company by shareholders in general meeting. The proposed director must qualify to act as a director under Companies Act.

Powers of Directors in AoA (Articles of Association)

Articles of Association need to authorize the appointment of Additional Director by the Board. Also, the maximum number of directors that can be appointed by a company is not exceeded after additional director appointment.

Important Steps for Appointment of Additional Director

According to the Section 161(1)- The Director to be appointed by Board of Directors is not such a person who has failed to get appointed as a Director in a General Meeting

According to the Section 161(1)- Board of Directors shall be authorized by AOA of the company to appoint an Additional Director.

According to the Section 149(1)- Total number of Directors in the Company shall not exceed the limit after appointing of an Additional Director section 149(1).

According to the Section 152(3)- The individual who will be appointed as an Additional Director shall hold Active DIN.

What are the Documents Required?

  1. DIN Number.
  2. Address Proof
  3. Identity Proof Document
  4. Digital Signature.

To apply for DIN / DSC

  1. PAN (Mandatory for Indian Nationals)
  2. Aadhaar
  3. Passport
  4. Board Resolution for proposal of appointment
  5. Latest Address proof like Phone / Utility Bills / Bank Statement
  6. For Filing Returns with ROC
  7. Board Resolution
  8. Consent to Act as Director
  9. Declaration by Director
  10. Letter of Appointment