The appointment and resignation of a director are crucial aspects of corporate governance that directly impact the management and operations of a company. As per the companies must adhere to the prescribed legal procedures while appointing or removing a director to ensure compliance with regulatory requirements.

Appointment of a Director can occur due to various reasons, such as expansion, strategic decision-making, or replacing an existing director. A company may appoint a director through a board resolution or a shareholders’ resolution in a general meeting, depending on the type of appointment. The appointed individual must obtain a Director Identification Number (DIN) from the Ministry of Corporate Affairs (MCA) and provide consent via Form DIR-2. Additionally, the company must file Form DIR-12 with the Registrar of Companies (ROC) within 30 days of appointment, along with the board resolution and the director’s declaration.

Resignation of a Director may occur voluntarily due to personal reasons, professional commitments, or other obligations. A resigning director must submit a written resignation letter to the board, and the company must acknowledge the resignation by passing a board resolution. The company is required to file Form DIR-12 with the ROC, and the resigning director must file Form DIR-11 to inform the MCA about their resignation. The resignation becomes effective from the date mentioned in the resignation letter or the date of receipt by the company.

Proper documentation and compliance are essential to avoid legal complications and penalties. The company must also update its records, including statutory registers, MOA/AOA (if necessary), and notify stakeholders regarding the change in directorship. Seeking professional assistance from company secretaries (CSs) or chartered accountants (CAs) ensures a smooth transition while adhering to regulatory norms.