What is a Change in Director?
A change in director refers to any modification in the composition of a company's Board of Directors. This includes adding a new director, accepting a resignation, removing a director, or changing a director's designation (e.g., from Additional Director to Whole-time Director).
All such changes must be reported to the Registrar of Companies (ROC) within 30 days to maintain compliance and avoid penalties.
Types of Director Changes
- Appointment: Adding a new director to the board to bring expertise or fill a vacancy.
- Resignation: A director voluntarily stepping down from their position.
- Removal: The shareholders or board removing a director due to non-performance, disqualification, or other reasons.
- Change in Particulars: Updating a director's personal details like address, name, or mobile number.
Process for Changing a Director
1. Appointment of a New Director
- Obtain Digital Signature Certificate (DSC) and Director Identification Number (DIN) for the proposed director.
- Obtain written consent in Form DIR-2 and declaration of non-disqualification in Form DIR-8.
- Hold a Board Meeting to approve the appointment.
- If required, hold a General Meeting for shareholder approval.
- File Form DIR-12 with the ROC within 30 days.
2. Resignation of a Director
- Director submits a written resignation letter to the company.
- Hold a Board Meeting to accept the resignation.
- Company files Form DIR-12 with the ROC within 30 days.
- Director files Form DIR-11 with the ROC (optional but recommended).
3. Removal of a Director
- Shareholders issue a Special Notice for removal.
- Send notice to the concerned director and give them an opportunity to be heard.
- Hold a General Meeting and pass an Ordinary Resolution.
- File Form DIR-12 with the ROC within 30 days.
Essential MCA Forms
- Form DIR-12: The primary form for appointment, resignation, and removal of directors.
- Form DIR-11: Filed by the resigning director to inform the ROC directly.
- Form DIR-6: Used to update a director's personal details (address, mobile, email).
- Form DIR-3 KYC: Annual KYC filing for all directors with a DIN.
- Form MGT-14: Filed for certain resolutions related to director appointments.
Fees & Penalties
Filing Fees: The government fee for Form DIR-12 depends on the company's authorized capital (typically ₹300 - ₹600).
Late Filing Penalties: If filed after 30 days, additional fees apply:
- Up to 30 days delay: 2 times normal fee.
- 30-60 days delay: 4 times normal fee.
- 60-90 days delay: 6 times normal fee.
- 90-180 days delay: 10 times normal fee.
- Beyond 180 days: 12 times normal fee.
Post-Change Updates
Once the director change is approved by the ROC, you must update other records:
- GST Registration: Update authorized signatory details on the GST portal.
- Bank Accounts: Submit the Board Resolution and new KYC to the bank to change signatories.
- Licenses: Update details in IEC, FSSAI, Shops & Establishment, etc.
