Relevant Provisions
Section 161(1) of the Companies Act, 2013
The Board of Directors of a company, whether a public or private company, may co-opt an additional director on the Board at any point of time.
Such co-option will be governed by the provisions as provided under Section 161(1) subject to the relevant regulations under the articles of association of the company.
Why is an Additional Director appointed?
Generally, this is done by the Board of Directors, considering the necessity of a Director on the Board taking into account the recent business developments and requiring his expertise to advise the Board appropriately on the matter.
It could be done under other circumstances as well requiring such appointment.
Eligibility for Appointment
Any person other than a person who fails to get appointed as a director in a general meeting can be appointed as an additional director by the board of directors at any point of time.
The person shall not be disqualified to be appointed as a director as per the provisions of Section 164 of the Companies Act, 2013.
Maximum Number of Directors
In the calculation of maximum number of directors on the board of a company as provided in section 149(1)(b), the number of additional directors on the board will also be included.
Duration of Office of Additional Director
An additional director shall hold office:
• up to the date of the next annual general meeting; or
• the last date on which that AGM should have been held;
• whichever is earlier.
In that AGM, with the consent of the members, the appointment of an additional director may be regularised so as to appoint him as an executive or non-executive director of the company.
Format of Board Resolution for Appointment of an Additional Director
#. To Appoint Mr. ...................... as an Additional Director
“RESOLVED THAT pursuant the provisions of Section 161(1) of the Companies Act, 2013 read with Article .... of the Article of Association of the company, Mr. ......................, who has given his consent to act as a director, be and is hereby appointed as an Additional Director of the company, who shall hold office up to the date of the ensuing ...th Annual General Meeting of the company.
FURTHER RESOLVED THAT (Name of the Person), (Designation) be and is hereby authorized to digitally sign and submit the Form DIR-12 with Registrar of Companies, ............... and complete all other formalities in this connection and to do all such acts, deeds and things as may be necessary for the purpose of giving effect to the foregoing resolution.”
Format of Board Resolution for Regularisation of Appointment of an Additional Director as a Director
#. To Appoint Mr. ...................... as a Non-executive Director
“RESOLVED THAT in pursuance with the provisions of Sections 149, 152, 160 of the Companies Act, 2013 and relevant rules made thereunder, including any modifications or re-enactments thereto, read with Article .... of the Articles of Association of the company, subject to the approval of the members in the ensuing ...th Annual General Meeting, Mr. .................... having DIN: ....................., who was appointed as an Additional Director of the company w.e.f .................... by the Board of Directors and who holds office up to the date of the ensuing ...th AGM and in respect of whom the company has received a notice in writing along with the required deposit from a member proposing his/her candidature for the office of Director of the company, be and is hereby appointed as a Non-executive Director whose period of office will be liable to determination by retirement of directors by rotation.”
Format of General Meeting Resolution for Regularisation of Appointment of an Additional Director as a Director
#. To Appoint Mr. ...................... as a Non-executive Director
“RESOLVED THAT in pursuance with the provisions of Sections 149, 152, 160 of the Companies Act, 2013 and relevant rules made thereunder, including any modifications thereto or re-enactments thereof, read with Article .... of the Articles of Association of the company, Mr. .................... having DIN: ....................., who was appointed as an Additional Director of the company w.e.f .................... by the Board of Directors and who holds office up to the date of the ensuing ...th AGM and in respect of whom the company has received a notice in writing along with the required deposit from a member proposing his/her candidature for the office of Director of the company, be and is hereby appointed as a Non-executive Director whose period of office will be liable to determination by retirement of directors by rotation.”
FURTHER RESOLVED THAT the Board of Directors or any committee thereof be and is hereby authorised to file necessary form with the Registrar of Companies, ......... and to complete all other necessary formalities for the appointment and to do all such acts, deeds and things as may be required for the purpose of giving effect to the foregoing resolution.”
Explanatory Statement under Section 102 of the Companies Act, 2013
Item no. ...
Mr. ..................... was co-opted as an Additional Director of the company with effect from ...(Date).... pursuant to Section 161(1) of the Companies Act, 2013 read with Article ... of the Articles of Association of the company.
Mr. ..................... holds office of Additional Directorship up to the date of the ...th Annual General Meeting. The company has received a notice in writing from a member along with a deposit of Rs. 100,000/- proposing the candidature of Mr. ................ for the office of Director under the provisions of Section 160 of the Companies Act, 2013.
The Board of Directors, in its meeting held on ...(Date)...., has approved the regularisation of the appointment of Mr. ..................... as a Director of the company.
Mr. ........................ is not disqualified to be appointed as a director as per the provisions of Section 164 of the Companies Act, 2013.
Mr. ....................... has ....years of rich experience of working in the .............. industry. The Board believes his advice and contributions will be of great benefit for the growth of the company.
Mr. ...................... is entitled to receive the sitting fees for attending the meetings of the board or any committee thereof. He shall not be entitled for any other form of remuneration from the company.
The Board accordingly recommends the resolution as set out in Item no. .... of the Notice for approval of the members.
None of the Directors of the company other than Mr. ...................... is interested or concerned in the said resolution.
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