Appointment of directors and disqualification

Law

1. M.M INSTITUTE OF MANAGEMENT
PRSENTATION ON :
MULLANA, AMBALA
Appointment of Directors
SUBMITTED BY :
PRINCE & AKSHAY
MBA 1ST (C)
12247132, 12247171
SUBMITTED TO :
DR. JYOTI GROVER

2. Table of content
Director
Appointment of Director
Qualification and Disqualification of
Director
Removal of Director

3. INTRODUCTION
A Director is an individual appointed or elected to the board of a company
who is responsible for overseeing the company’s operations and strategic
directions. Director have a duty to act in the best interest of the company
and its shareholders. They participate in board meetings, make important
business decisions, and set policies for the company’s management.

4. NUMBER OF DIRECTORS (SEC 149)
1.Minimum number of Directors: In the case of public Company 3, In case of
private company 2 and in the case of one person Company 1.
2.Maximum number of Directors: The Maximum Number of directors in any type of
company is 15. If the company wants to appoint more than 15 directors, they can
do after passing a resolution.
3.Women director: At least one women director shall be on the board of such
class of the companies.
4.Resident Director: Every company shall have at least one director who has
stayed in India for a total period of not less than 182 days in the previous
clender

5. APPOINTMENT OF DIRECTORS (SEC 152)
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Appointment of First Director: The first director of most of the companies is named in
their article. If they are no named in the articles of the company, then subscribers to the
memorandum who are individual shell be deemed to the first directors of the company
until the directors are duly appointed.
1.
Appointment of Directors in Annual General Meeting: A company must appoint a director by
passing a resolution in a general meeting. This can be done at an Annual General Meeting
(AGM).
2.
According to Eligibility: A person can be appointed as a director unless they have a
director identification number.
3.

6. 4. Appointment of director by Consent: The director must give their consent to
hold the office and file it with the registrar within 30 days.
5. Appointment of director by Filing: The company must file the resolution for
appointing the director in Form MGT-14 with the registrar of companies within 30
days.
6. Minimum number of Directors: A private company must have at least two
directors, but can have up to fifteen. A public company must have at least two
directors.
7. Appointment of Director in Casual Vacancy: If any vacancy is empty by death or
resignation of a director appointed by the shareholders in the general meetings ,
then the board of directors can appoint a director to fill up the suvh vacancy.
Cont.......

7. Qualifications of a Director
Age: Must be between 21 and 70 years old .1.
Mental state: Must have be sound minded.2.
Criminal Record: Must have been convicted of an offense that result in a
prison sentence of more than six month.
3.
Director Identification Number (DIN): Must have a DIN.4.
Number of companies: Must not be appointed as a director in more than 20
companies, or 10 in case of public companies.
5.

8. Disqualifications of a Directors (sec 164)
A person shall not be eligible for appointment as a director of a company, if:
He is of sound mind and stands so declared by a competent court.1.
He is an undischarged insolvent.2.
He has applied to be adjudicated as an insolvent and his application is
pending.
3.
He has been convicted by a court of any offence.4.
He has not got the DIN.5.
Any person who is director of any company which has not filed any
financial statement and annual return of 3 continuous financial years.
6.

9. Removal of Directors Sec ( 169)
Ordinary Resolution: A company may, by ordinary resolution, remove a
director other than a director appointed.
1.
Special Notice: A special notice is required before any resolution, to remove
a director under sec 169 .
2.
Director Appointed on proportional representation: The company cannot
remove a director under the principal of proportional representation or
under sec 163.
3.
Written Representation: The director who is resigning gives representation
is writing to the companyfor notification to the members of the company.
4.

10. 5.Filing of Vacancy: The vacency resulting from aforesaid removal, may be
filled in by the appointment of another director at the same meeting at which
the director is removed.
6.Casual Vacancy: If the vacancy is not filled in the same meeting as above,
then it may be filled with as a casual vacancy as per the provisions of this
act.

11. QUIZ...
1. Question 1: What is the minimum age requirement for a person to be appointed as a director
in most jurisdictions?
• a) 16 years
• b) 18 years
• c) 21 years
• d) 25 years
2. Question 2: Which of the following can lead to the disqualification of a director?
• a) Conviction of a criminal offense involving dishonesty
• b) Being declared bankrupt
• c) Persistent default in filing company financial statements
• d) All of the above

12. 3. Question 3: True or False: A director can only be removed for misconduct.
• a) True
• b) False
4. Question 4: True or False: A person disqualified by court order can still serve as a
director of any company.
• a) True
• b) False
5. Question 5: What is the required notice period for a resolution to remove a director?
• a) 7 days
• b) 14 days
• c) 21 days
• d) 30 days
6. Question 6: In a typical corporate structure, who has the power to appoint a
director?
• a) The board of directors only
• b) Shareholders in a general meeting
• c) The company secretary
• d) The Chief Financial Officer (CFO)