A company appoints directors to manage its affairs. Section 152 of the Companies Act, 2013 sets out the rules for the appointment. The process is simple but has a few mandatory steps.
The consent
A person cannot be appointed as a director unless they give their consent in writing. The consent is given in Form DIR-2. The consent must be obtained before the appointment, and it must be filed with the company.
The DIN
Every director must have a Director Identification Number (DIN). The DIN is a unique number issued by the Ministry of Corporate Affairs. A person can apply for a DIN through Form DIR-3. The DIN is mandatory for the appointment, and a person without a DIN cannot be appointed as a director.
The appointment
The appointment is made by the board of directors, or by the shareholders at a general meeting, depending on the type of appointment. The appointment must be made in accordance with the articles of association. The company must file Form DIR-12 with the ROC within 30 days of the appointment.
The DIR-12 filing
Form DIR-12 is the return of appointment of directors. It must be accompanied by the consent in Form DIR-2, the DIN, the declaration of independence where applicable, and the board resolution. The filing must be completed within 30 days of the appointment.
The practical points
The company should obtain the consent before the appointment, verify the DIN, pass the board resolution and file DIR-12 within 30 days. The company should also update the register of directors and the register of directors' shareholding. A delay in filing DIR-12 attracts a penalty.
Call to Action: We advise companies on director appointments, DIN applications and DIR-12 filings. For an appointment review, contact office@anujdesaiassociates.com, Ph No. 9619456656, Website https://anujdesaiassociates.com, LinkedIn linkedin.com/in/ca-anuj-desai-122547230.