Appoint Alternate Director in Casual Vacancy

INTRODUCTION

  • We are here Discuss the legal validity, Procedure & Timelines for Appointment of Alternate Directors in Casual vacancy.
  • THIS SECTION 161 IS APPLICABLE ON PUBLIC COMPANY & PRIVATE COMPANY WHICH IS SUBSIDIARY OF PUBLIC COMPANY

 

SITUATIONS IN WHICH CASUAL VACANCY IS ARISES

  • Resignation by Director (Oral or Written).
  • Death of Director.
  • Disqualified in Section 164 of companies act, 2013.

LEGAL PROVISIONS

  • As per section 149 (1) of companies act 2013, every company to the required appointment of Directors (only Individuals) in Board of company.
  • The company have a limit of Minimum & Maximum Directors as per the following List:-
Director Appointment Limit
  • The company Articles of Association (AOA) allows the company to appoint Directors in Casual Vacancy.
  • The Directors in Casual Vacancy must have DIN (Director Identification Number).
  • The procedure of appointing of Director in casual vacancy as per section 161 (4) of companies act, 2013 and relevant rules.
  • The person not able to appoint as a director in General meeting of shareholder or Resolution to appointment is failed in general meeting (Not getting majority Votes) shall not eligible to appoint as Director in Casual Vacancy in the company through Board Resolution.
  • The appointment of a director in Casual Vacancy by Board of Directors (BODs) bypassing Board Resolution by Majority (MORE THAN 50% VOTED IN FAVOR).
  • The Tenure of director in Casual Vacancy is same as a director due to Casual Vacancy is Arises.

PROCEDURE TO APPOINTMENT OF ALTERNATE DIRECTOR IN CASUAL VACANCY

  • Drafting of Board Meeting Notice by Company Secretary or Legal Advisors.
  • Send 7 Days advance notice of Board Meeting to all directors Through Mail / Courier / Registered Post.
  • It’s not Appointed by Board Resolution by Circulation OR Appointed only by Physical conduct the Board Meeting and Pass the Board Resolution.
  • The Board meeting to held any place, time & Days (Even public Holidays).
  • Calling of Board Meeting.
  • Resolution present in the front of Board of Directors with full details of candidate to be appointed as Director in Casual vacancy.
  • Appointment of Director in Casual vacancy made by the Board of Directors by passing Board Resolution.
  • Issue Appointment letter (mention all Terms & Conditions) by Company.
  • Preparation of Minutes / Certified True Copy (CTC) of Board resolution / other relevant Documents.
  • Filing of Form DIR – 12 with Registrar of Companies (ROCs) through MCA portal within 30 days of appointment.

DOCUMENTS REQUIRED TO APPOINTMENT OF DIRECTOR IN CASUAL VACANCY

  • The person must have DIN (Director Identification Number).
  • The person cannot appoint as Directors in more than 20 Companies.
  • The person is not disqualified under section 164 of companies act, 2013 to appoint as Director in Casual vacancy.
  • DIR – 2 (Consent to Act as Director of Company).
  • DIR – 8 (The person is not disqualified under section 164 (2) of companies act, 2013).
  • MBP – 1 (Disclosure of Interest by Director at the time of appointment as well as every financial year).

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