Appointment of Alternate Director

INTRODUCTION

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

SITUATIONS IN WHICH ALTERNATE DIRECTOR APPOINTED

  • The original Director is absent from India for more than 3 months then Board of Directors may appoint Alternate Director in place of original Director

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:-
Minimum & Maximum Director Appointment Limit
  • The Alternate Directors counted in the Limit of 20 Directors.
  • The company Articles of Association (AOA) allows the company to appoint Alternate Directors.
  • The Alternate Directors must have DIN (Director Identification Number).
  • The procedure of appointing of Alternate Director as per section 161 (2) of companies act, 2013 and relevant rules.
  • The appointment of Alternate director by Board of Directors (BODs) bypassing Board Resolution by Majority (MORE THAN 50% VOTED IN FAVOR).
  • The Tenure of Alternate director is up to the original Director return back to India or The day tenure of original Director is expires.
  • The reappointment in General Meeting provisions applicable on Original Director not on Alternate Director.
  • The Person Already Appointed as Alternate Director in another company is not eligible to appoint as Alternate director in another company.
  • The Alternate director may be appointed as Independent Director if he complies all conditions to become an Independent Director as per section 149(6) of companies act 2013.

PROCEDURE TO APPOINT ALTERNATE DIRECTOR IN THE COMPANY

  • 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.
  • The Board meeting to held any place, time & Days (Even public Holidays).
  • The Alternate Director is appointed through Physical Board Meeting as well as Board Resolution by Circulation
  • Calling of Board Meeting.
  • Resolution present in the front of Board of Directors with full details of candidate to be appointed as Alternate Director.
  • Appointment of Alternate Director 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 APPOINT ALTERNATE DIRECTOR

  • 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 Alternate Director.
  • 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.
  • MGP 14 (The Director is one level Below KMP (Key Managerial person)

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