Directors play a crucial role
in the functioning of companies, due to their analytical skills, farsighted
decision, and business strategies, a company establishes its positive identity,
reputation, and achieve growth in the market. Therefore, it will not
exaggeration directors are the brain of organizations. Generally, organizations
rotate directors in two ways; either appointing a new director or resignation
of existing. The Board of Directors approves the resignation of the director
whereas the appointment must be made through the consent of shareholders. Whether
appointment, resignation, or removal of directors, the change does not take
effect until the intimation is made to the Ministry of Corporate Affairs, Government
of India.
Why Change of Directors is
Required in Organizations?
· To hire new talent who can make innovative
business strategies and give a significant contribution to the growth of the
organization.
· Maybe the existing director unable to serve the
organization after a certain period due to retirement or other personal reason.
· According to the company act, there should be
at least two directors in a private company and three directors in the public company.
At any point of time, if the number of directors reduces below the limit, then
in such a scenario company must appoint new directors.
Legal Steps to Change
Directors in The Company:
Section 169 of the Company
Act, 2013 explains the change of a Director in a company by the members:
Section 169(1):
There is the requirement of
ordinary resolution to remove a director from a company. Directors are
appointed by Tribunal under section 242 will not be removed. In case if the independent
director is appointed for the second term shall not be removed by special
resolution only.
Section 169(2):
A special notice is required
for a resolution, either to remove a director or to appoint somebody in his/her
place.
Section 169(3):
Company sends special notice
along with the resolution of removal of directors and an opportunity of being
heard is given to him/her at the meeting.
Section 169(4):
If a concerned director wants
to make representation, he/she gives it in writing to the company and request
to notify its members.
Section 169(5):
Vacancy created by the removal of a director is
filled by the appointment of another director in the same meeting.
Section 169(6):
New Director is appointed in
place of the removal of a director.
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·
Highly proficient lawyers and have expertise in
their area.
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End-to-end services, while ensuring
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