Additional Director

Who is an Additional Director?

An Additional Director is a director appointed by the board of directors of a company to fill a vacant position on the board. The additional director’s term of office is until the next annual general meeting (AGM), unless the shareholders pass a resolution to regularize the appointment and make the additional director a permanent director.

How is an additional director appointed?

The appointment of an additional director must be authorized by the company’s articles of association. they must also not have been rejected for appointment as a director by the shareholders in a general meeting. The Board of director appoint additional Director.

What are their powers and responsibilities?

The same powers and responsibilities as any other director of the company. This includes the right to attend and vote at board meetings, and to participate in the management of the company.

How is an additional director different from a regular director?

The main difference between an additional director and a regular director is the term of office. An additional director’s term of office ends at the next AGM, unless the shareholders pass a resolution to regularize the appointment.

Can be appointed as chairman?

Yes, they can be appointed as chairman of the board of directors. There is no legal restriction on this.

Can be counted in the limit of directors as defined under section 149 of Companies Act, 2013.

Yes, They are also included in the maximum limit of directors that can be appointed by company under Section 149 of Companies Act, 2013.

OFFICE TENURE OF ADDITIONAL DIRECTOR:

The term of an additional director is only upto the ensuing Annual general meeting . If they are not regularized at the AGM their term is automatically expired. 

Further, there is no restrictions if they resigns before the Annual general meeting of the company.

Sections & Rules need to be  referred their appointment:

Section of [ Chapter XI Appointment and Qualifications of Directors ]

Rules of [ Chapter XI The Companies (Appointment and Qualifications of Directors) Rules, 2014

Points need to be checked before appointing additional director:

1. The articles of association are the governing document of a company. Therefore, Article Of Association must have given power to director for appointing additional director.
2. The proposed additional director must not have been rejected for appointment as a director by the shareholders in a general meeting.

1. They must have qualification to be appointed as director of the company Or they should not bear any disqualification of director as mentioned in the section 164of the Companies act,2013.

Procedure of appointment:

1. Check whether the proposed additional director is having Director Identification Number .

If not , then apply for the same . The procedure for getting Director Identification Number is click here

1. Obtain the consent of Proposed director (additional) for his appointment. Consent should be in the form of  Dir-2 .
2. Issue the notice to held board meeting for the appointment of additional director
3. Hold the board meeting and passed Board resolution for their appointment.
4. File DIR-12 within thirty days of passing board resolution to intimate ROC for such appointment.

Format of Board Resolution for appointing Additional Director of the company:

ON THE LETTER HEAD OF THE COMPANY

CERTIFIED TRUE COPY OF THE RESOLUTION PASSED AT THE MEETING OF THE BOARD OF DIRECTORS OF COMPANY NAME HELD ON DAY & DATE AT TIME AT ITS CORPORATE OFFICE ADDRESS.

 Appointment of Additional Director

 “RESOLVED THAT pursuant to Sections 161(1) of Companies Act, 2013 read with the applicable rule of the Companies (Appointment and Qualifications of Directors) Rules 2014, and any other applicable provisions of the Companies Act, 2013 (including any statutory modifications or re-enactment thereof, for the time being in force) Director Name  (DIN: ……………….), be and is hereby appointed as an Additional Director on the Board of Directors of the Company with the immediate effect who shall hold office up to the date of the ensuing Annual General Meeting of the Company.”

“RESOLVED FURTHER THAT any of the Directors of the company be and are hereby jointly and severally authorized to sign and file the necessary e-form with the concerned Registrar of Companies and to do all such acts, deeds and things which are necessary to give effect to the above said resolution.”

For COMPANY NAME  

                                                                    // Certified True Copy//

Director Name 

(Director)

DIN: …………………….

Address

Format of Appointment Letter

ON THE LETTER HEAD OF THE COMPANY

To, Date: …………………..

Director name

DIN: ……………………

Address:

Dear Sir,

SUB: Appointment letter of ……………………… as Additional Director of the Company

We are pleased to inform that you have been appointed as Additional Director of COMPANY NAME in the Board Meeting of the Company held on DAY&DATE with immediate effect.

You are requested to kindly take a note of it.

Yours Sincerely,

For COMPANY NAME  

Director Name 

(Director)

DIN: …………………….

Address