Overview
Directors are the key managerial authorities responsible for managing and controlling the affairs of a company. Under the Companies Act, 2013, directors are appointed, removed, or may resign in accordance with prescribed procedures and regulatory filings with the Ministry of Corporate Affairs (MCA).
Any change in directorship does not become effective unless proper Board approval and ROC filing are completed within the prescribed timeline.
Eligibility Criteria to Become a Director
To be appointed as a director in India, an individual must:
- Be a natural person (only individuals can act as directors)
- Obtain a valid Director Identification Number (DIN)
- Be legally competent to enter into a contract
- Not be disqualified under Section 164 of the Companies Act, 2013
Age Criteria
- Minimum age: 18 years
- No maximum age limit (except for certain categories like Managing Director/Whole-time Director where shareholder approval is required if above 70 years)
Resident Director Requirement
Every company must have at least one director who has stayed in India for a total period of 182 days or more in the financial year.
Limit on Number of Directorships
- A person can hold directorship in a maximum of 20 companies
- Out of these, maximum 10 can be public companies
- Directorship in dormant companies is excluded for this calculation
Disqualification of Director (Section 164)
A person cannot be appointed or continue as director if:
- Declared of unsound mind by a court
- Undischarged insolvent
- Convicted and sentenced to imprisonment of 6 months or more
- Has not filed financial statements or annual returns for 3 consecutive financial years (company default case)
- DIN is deactivated due to non-filing of DIR-3 KYC
Types of Directors
- Executive Director
- Managing Director
- Whole-time Director
- Non-Executive Director
- Independent Director
- Nominee Director
- Additional Director
- Alternate Director
Minimum Number of Directors (Section 149)
- Private Limited Company – Minimum 2 directors
- Public Limited Company – Minimum 3 directors
- One Person Company (OPC) – Minimum 1 director
Maximum number of directors: 15
More than 15 directors require special resolution.
Mandatory Woman Director
Mandatory for:
- Listed companies
- Public companies with:
- Paid-up share capital ≥ ₹100 Crore OR
- Turnover ≥ ₹300 Crore
Procedure for Appointment of Director
Step 1: Obtain DIN (if not already allotted)
Apply through SPICe+ at incorporation or via DIR-3.
Step 2: Obtain Consent
Proposed director must provide:
- Consent in Form DIR-2
- Declaration of non-disqualification
- Disclosure of interest (MBP-1)
Step 3: Pass Board Resolution
Board approves appointment.
Step 4: ROC Filing
File Form DIR-12 within 30 days of appointment.
Step 5: Update Statutory Registers
Update Register of Directors and Key Managerial Personnel.
Documents Required for Appointment
- PAN Card (self-attested)
- Address proof (Aadhaar / Passport / Driving License / Voter ID)
- Passport-size photograph
- Email ID and Mobile Number
- DIN (if already allotted)
- DIR-2 (Consent to Act as Director)
- MBP-1 (Disclosure of Interest)
For foreign nationals:
- All documents must be apostilled/notarized.
Resignation of Director (Section 168)
A director may resign by giving written notice to the company.
Procedure for Resignation of Director
Step 1: Submit Resignation Letter
Director submits signed resignation letter mentioning effective date.
Step 2: Board Meeting
Board takes note of resignation and passes resolution.
Step 3: ROC Filing by Company
Company files Form DIR-12 within 30 days of resignation.
Step 4: Optional Filing by Director
Director may file Form DIR-11 within 30 days (recommended for record protection).
Step 5: Update Statutory Registers
Register of Directors must be updated.
Effective Date of Resignation
Resignation becomes effective from:
- Date company receives notice, OR
- Date specified in resignation letter, whichever is later.
Director remains liable for offences committed during tenure.
Special Case: Resignation of All Directors
If all directors resign:
- Promoter or Central Government appoints required number of directors.
- Newly appointed directors hold office until directors are appointed in general meeting.
Common Reasons for Resignation
- Board disputes
- Better career opportunity
- Governance concerns
- Regulatory non-compliance
- Completion of nominee tenure
Post Appointment / Resignation Compliance
- Update statutory registers
- Disclosure of interest (MBP-1 annually)
- DIR-3 KYC filing annually by 30th September
- Beneficial ownership disclosure (if applicable)
For professional assistance in Appointment or Resignation of Director, consult qualified compliance professionals to ensure proper documentation and timely ROC filings.
