Appointment & Qualification of Directors

Question 1

‘X’ was appointed as a director for life by the AOA of a private company incorporated on 1 June, 2014.

The articles also empowered ‘X’ to appoint a successor. ‘X’ appointed, by will, ‘G’ to succeed him after his death.

Can ‘G’ succeed ‘X’ as a director after the death of ‘X’?

Answer 1

Legal Provision:
 No director shall assign his office to any other person.
 If he does, the assignment shall be void (Section 166).

Facts of the Case:
 In the given case, the articles of a company empowered its director to appoint a successor.
 The director appointed, by his will, Mr. G to succeed him as a director after his death.

Analysis:
 The Court observed that a director is prohibited from assigning his office.
 The word ‘his’ used in section 166 indicates that the prohibition applies only when an office held by a director is assigned to any other person.
 Where a director dies, the office held by him becomes vacant and therefore, such office cannot be assigned to any other person.
 Therefore, appointment of a new person in such office does not amount to an assignment within the meaning of section 166.
 Oriental Metal Pressing Pvt. Ltd. v B.K. Thakoor (1961).

Conclusion:
 The facts of the given case are identical to the facts discussed in the above case.
 Accordingly, it can be said that appointment of ‘G’ is valid and it does not amount to an assignment of office by ‘X’.

Question 2

Some changes in the particulars of a Director, who has already obtained a DIN have taken place. Now the Director wants to incorporate the changes in his DIN in the database maintained by the CG in this regard.

Describe the procedure to be followed by the Director.

OR

S, a director in N Limited holding DIN wants to make certain changes in the particulars of his DIN. What procedure would you follow to get changes incorporated in the DIN already allotted to S?

Answer 2

The given problem relates to Rule 12 of the Companies (Appointment and Qualification of Directors) Rules, 2014, as explained below:

a. Every individual who has been allotted a DIN shall, in the event of any change in his particulars as stated in Form DIR-3, intimate such change(s) to the CG within a period of 30 days of such change(s) in Form DIR-6 in the following manner, namely:

—> The applicant shall download Form DIR-6 from the portal, fill in the relevant changes, verify the Form and attach duly scanned copy of the proof of the changed particulars and submit it electronically.
—> The form shall be digitally signed by a CA in practice or a CS in practice or a cost accountant in practice.
—> The applicant shall submit the Form DIR-6.

b. The CG, upon being satisfied, after verification of such changed particulars from the enclosed proofs, shall incorporate the said changes and inform the applicant by way of a letter by post or electronically or in any other mode confirming the effect of such change in the electronic database maintained by the Ministry.

c. The DIN cell of the Ministry shall also intimate the change(s) in the particulars of the director submitted to it in Form DIR-6 to the concerned Registrar(s) under whose jurisdiction the registered office of the company or companies in which such individual is a director is situated.

d. The concerned individual shall also intimate the change(s) in his particulars to the company or companies in which he is a director within 15 days of such change.

Question 3

Sec 161 (2)

Answer 3

Alternate Director

Question 4

Who have power to appoint u/s 161 (2)?

Answer 4

only BOD - if it is authorized by -

1. AOA; or
2. OR passed at GM

Question 5

Sec 160?

Answer 5

Right of person other than retiring director to stand for directorship

Question 6

What is the deposit amount u/s 160?

Answer 6

Rs. 1 lakh or such other sum prescribed

Question 7

What are the requirements of notice u/s 160?

Answer 7

1. The notice shall be given at least 14 days before the GM.
2. The notice shall be deposited at the RO of the company.
3. The notice shall be signed.
4. A sum of Rs. 1 lakh or such higher amount as may be prescribed, shall be deposited along with the notice.

Question 8

What is the T/L for informing the members u/s 160?

Answer 8

The company shall inform its members about the candidature of the person proposed as a director at least 7 days before the GM.

Question 9

What are the prescribed classes of companies for appointment of woman director?

Answer 9

Prescribed classes of companies -

Rule 3 of Companies (Appointment and Qualification of Directors) Rules, 2014

(i) Every listed company; and

(ii) Every public company having -
—-> PUSC = Rs. 100 crore or more; and
—-> TO = Rs. 300 crore or more.

For this purpose, the PUSC or TO, as the case may be, as on the last date of latest audited FS shall be taken into account.

Question 10

To which companies Sec 151 applies?

Answer 10

only to listed Co

Question 11

Who are the shareholders eligible to give notice u/s 151?

Answer 11

Notice shall be given by at least -

—> 1,000 SSH; or
—> 1/10 of the total number of SSH,

whichever is lower.

Question 12

What is the minimum no. of directors as per Sec 149(1)?

Answer 12

Public - 3
Pvt - 2
OPC - 1

Question 13

What is the maximum no. of directors a Company can appoint?

Answer 13

– A company shall have a maximum of 15 directors.
– However, a company may appoint more than 15 directors –> by passing SR.
– No CG approval is required for the same.

Question 14

Is there any non-applicability/ exemption for maximum directors u/s 149(1)?

Answer 14

A Govt Company & Sec 8 Company -

–> may have more than 15 directors without passing SR

–> if such company has not committed any default in filing with ROC

–> its FS u/s 137 or Annual return u/s 92.