Procedures under Companies Act, 2013

Appointment of a director other than a retiring director in the General Meeting

Section 160 provides for the right of persons other than the retiring directors to stand for the directorship at any general meeting of the Company, if he or some other member intending to propose him as a director complies with the requisites given under Section 160 as explained under.

The following requisites of Section 160(1) must be complied with:

  • The company must receive a notice proposing a person as a candidate for directorship, to be appointed as a director at a general meeting of the company and not necessarily only at an annual general meeting.
  • The notice of candidature can be given either by the candidate himself or by any member of the company.
  • The notice must be in writing and signed by the candidate himself or the member giving it.
  • The notice must be given not less than 14 days before the meeting. This means notice must reach the company at least on the 14th day before the date of the meeting.
  • The notice must be left at the registered office of the company and must be given in the manner stipulated in Section 20 of the Companies Act, 2013.
  • The notice must be accompanied by an amount of Rs. 1, 00,000, by cheque or demand draft.
  • Amount of Rs. 1 lakh shall be refunded to the person who deposits the money, if the person proposed gets elected as a director or gets more than 25% per cent of total valid votes cast either on show of hands or on poll on such resolution.

Key Consideration:

  • Section 160 is not applicable on Private Companies.

The following procedure is to be followed for appointment of a director other than a retiring director in the General Meeting [Section 160 & Rule No. 8, 13, 17 and 18 of Companies (Appointment and Qualification of Directors) Rules, 2014]-

  1. The person proposing to be appointed as a Director or any member intending to propose him as a director is required to give a notice in writing not less than 14 days before the General Meeting at the registered office of the Company, signifying the candidature for the office of a director or the intention of a member to propose him as a candidate for the office of the Director. [Section 160(1)]
  1. Such notice must be accompanied with a deposit of Rs. 1 Lac or such higher amount as may be prescribed which will be refunded in case the candidate is elected as a director or gets more than 25% of total valid votes cast either on show of hands or on poll on such resolution. [Section 160(1)]
  1. On receipt of Notice, the Company will Inform all the members about the aforesaid candidature or intention, not less than 7 days before the meeting either:
  • by serving individual notices on the members through electronic mode to such members who have provided their email addresses to the Company for communication purposes and in writing to all other members; and placing such notice on the website of the company, if any  or
  • by advertisement of the candidature or intention at least once in English language in an English daily newspaper and once in principal vernacular language in a vernacular newspaper of the district where the Registered Office of the Company is situated, and circulating in that district.  [Section 160(2) and Rule 13 of Companies (Appointment and Qualification of Directors) Rules, 2014]
  1. Ensure that the individual proposed to be appointed as director does not suffer from any disqualification mentioned under Sections 164 and 165 of the Act.
  1. In case director proposed to be appointed in the meeting is independent, then follow the additional steps as provided in the procedure for appointment of Independent Director.
  1. Ensure that the person who is proposed to be appointed as Director must have Director Identification Number (DIN) before being appointed as director. [Section 152(3)]. If he does not have DIN, follow the procedure prescribed for obtaining DIN.
  1. Ensure that person proposed to be appointed as a director has furnished his DIN to the Company and a declaration in Form DIR 8 stating that he is not disqualified to become a director under the provisions of Companies Act, 2013 [Section 152(4) and Rule14(1) of Companies (Appointment & Qualification of Directors) Rules, 2014]
  1. Before appointing a person as Director, obtain his written consent to act as Director in Form No. DIR-2. along with the following attachments:
  1. Valid ID Proof
  2. Valid Address Proof

[Section 152(5) and Rule 8 of Companies (Appointment and Qualification of Directors) Rules, 2014]

  1. Hold and convene a General Meeting and pass an Ordinary Resolution by simple majority. Take care that the interested members shall not be counted in quorum and shall not participate in voting.
  1. If the proposed appointee gets elected as Directors or gets more than 25% of total valid votes cast either on show on hands or on poll, refund the deposit amount of Rupees One Lacs to the appointee or concerned member, as the case may be.  (Section 160(1)
  2. Obtain the declaration from the appointed Director regarding his interest in other entities in Form MBP.1 within 30 days of appointment or at the first Board Meeting in which he participates as Director, whichever is earlier. (Section 184(1) read with Section 189(2).
  1. File a return containing the particulars of appointment of director, with the Registrar in E-Form No. DIR-12 along with such fee as may be provided in the Companies (Registration Offices and Fees) Rules, 2014 within 30 days of such appointment. [Section 170(2) and Rule 8 and 18 of Companies (Appointment and Qualification of Directors) Rules, 2014]

Following details/documents are required for filing E-Form No. DIR-12:-

  • Details of interest in other entities.
  • Extract of the Resolution for Appointment;
  • Consent of the appointee director in Form No. DIR-2, along with self-attested copy of ID & Address Proof
  • Letter of appointment.
  • Any other document as may be applicable and/or prescribed.
  1. Obtain the following details from the Director for making entries in Register of directors and key managerial personnel and their shareholding:

(a) Director Identification Number;  

(b) present name and surname in full;

(c) any former name or surname in full;

(d) father’s name, mother’s name and spouse’s name(if married) and surnames in full;

(e) date of birth;

(f) residential address (present as well as permanent);

(g) nationality (including the nationality of origin, if different);

(h) occupation;

(i) office of director or key managerial personnel held or relinquished in any other body corporate;

(j)  the details of securities held by him in the company, its holding company, subsidiaries, subsidiaries of the company’s holding company and associate companies relating to-

               (i) the number, description and nominal value of securities;

                (ii) the date of acquisition and the price or other consideration paid;

                (iii) date of disposal and price and other consideration received;

  1. Make necessary entries in the Register of directors and key managerial personnel and their shareholding [Section 170(1) and Rule 17 of Companies (Appointment and Qualification of Directors) Rules, 2014]
  1. After appointment, the director concerned has to inform other companies in which he is director about his appointment within 30 days of his appointment in Form MBP-1. [(Section 184(1) read with Section 189(2)].
  1. Follow the procedure prescribed for preparing,    signing and compiling of minutes of General Meeting.
  1. Inform all concerned persons/ govt. authorities about the appointment of Director like Central Excise Authorities, Customs Authorities, Sales Tax Authorities, Service Tax Department, Chief Inspector of Factories, and Regional Provident Fund Commissioner etc.

Procedure Authors

ACS Divya Jain
ACS Palak Jain
ACS Ankita Jain
ACS Sugandh Jain
ACS Mansi Kapor
ACS Bhawna Sharma


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