Format of Director Appointment Letter, Resolution & Form DIR-8

According to the Companies Act, only an individual can be appointed as a member of the board of directors. Usually, the appointment of directors is done by shareholders. A company, association, a legal firm with an artificial legal personality cannot be appointed as a director. It has to be a real person.

The Director of a company is a person elected by the shareholders for managing the affairs of the company as per the Memorandum of Association and Articles of Association of the company. Since a company is an artificial judicial person created by law, it can only act through the agency of natural persons. Thus, only living persons can be Directors of a company and the management of a company is entrusted to the Board of Directors. Appointment of Directors can be required for a company from time to time based on the requirements of the shareholders of the business.

To appoint a director, the person proposing to become a Director must obtain a digital signature certificate (DSC) and director identification number (DIN). DIN can be obtained for any person who is above the age of 18. The nationality or residency status of the DIN applicant does not matters. Hence, Indian Nationals, Non-Resident Indians and Foreign Nationals can obtain DIN and be appointed as Director of a company in India.

Generally, in a public company or a private company subsidiary of a public company, two-thirds of the total numbers of Directors are appointed by the shareholders and the remaining one-third is appointed following the manner prescribed in Articles failing which, the remaining one-third of the Directors must be appointed by the shareholders. The Articles of a public company or a private company subsidiary of a public company may provide for the retirement of all the Directors at every AGM.

In a private company, which is not a subsidiary of a public company, the Articles can prescribe the manner of appointment of any or all the Directors. In case the Articles are silent, the Directors must be appointed by the shareholders.

The Companies Act also permits the Articles to provide for the appointment of two-thirds of the Directors according to the principle of proportional representation, if so adopted by the company in question.

Nominee Directors can be appointed by a third party or by the Central Government in case of oppression or mismanagement.

A Managing Director must be an individual and can be appointed for a maximum term of five (5) years at a time.

A person who is already a Managing Director / Manager of a public company or a private company subsidiary of a public company can become the Managing Director / Manager of only one other company (whether private or public) with the prior unanimous approval of the Board of such company. However, no such restrictions apply to a Manager or a Managing Director of "pure" private companies.

LETTER OF APPOINTMENT ON LETTERHEAD OF COMPANY

Dated:-

To:

Mr./Mrs....................................................

Address..................................................

Subject: Appointment as Additional Director u/s 161 of the Companies Act, 2013

Dear Sir,

I am pleased to confirm that the board of directors of the Company has appointed you as an Additional Director on the Board of Directors of the Company to hold office up to the date of the next Annual General Meeting of the Company Under Section 161 and other applicable provisions (including any modification or re-enactment thereof), if any, of the Companies Act, 2013.

Role of the Board

The board's role is to effectively represent and promote the interests of shareholders to add long-term value to the Company's shares. Having regard to its role, the board directs and supervises the management of the business and affairs of the Company including, in particular:

• Ensuring that the Company's goals are established and those strategies are in place for achieving them;
• establishing policies for strengthening the performance of the Company including ensuring that management is proactively seeking to build the business through innovation, initiative, technology, new products and the development of its business capital;
• Monitoring the performance of management;
• Deciding on whatever steps are necessary to protect the Company's financial position and the ability to meet its debts and other obligations when they fall due, and ensuring that such steps are taken;
• Ensuring that the Company's financial statements are true and fair and otherwise confirm with law;
• Ensuring that the Company adheres to high standards of ethics and corporate behaviour; and
• Ensuring that the Company has appropriate risk management/regulatory compliance policies in place.

All directors are expected to take decisions objectively in the interests of the Company. The board as a whole is collectively responsible for the success of the Company. All directors, whether non-executive or executive, have the same general legal responsibilities.

Timing and Location of Board Meetings, and Time Commitment

The board normally holds meetings as the occasion requires. Meetings usually take place at the Company's registered office in _______ (Name of the State). The duration of each meeting typically runs to half a day.

In addition to routine board meetings, you should allow time for preparatory work and travel, and ensure that you are in a position to make the necessary overall time commitment.

Remuneration

The board determines the level of remuneration paid to its non-executive members within any limitations imposed by shareholders.

The Company will reimburse you for all direct and indirect expenses such as Phone calls, accommodation and travelling expenses, reasonably and properly incurred and documented.

Board and Individual Director Evaluation Processes

The performances of the board as a whole and individual director are evaluated annually. If, in the meantime, there are any matters which cause you concern about your role you should discuss them with the Chairman of the board as soon as appropriate.

Outside Interests Including Directorships

It is accepted and acknowledged that you may have business interests other than those of the Company. You will disclose your concern or interest u/s 184 in any company or companies or bodies corporate (including shareholding interest), firms or other association of individuals, by giving a notice in writing in Form MBP-1. The interests register is tabled at each director's meeting. Please ensure that the Company is kept informed of any changes to your interests so that the interests register can be maintained up to date.

Any director is while holding office, at liberty to accept other board appointments so long as the appointment is not in conflict with the Company's business and does not materially interfere with their performance as a director of the Company. All other appointments must first be discussed with the Chairman before being accepted.

Shareholdings by Directors in the Company

Directors are encouraged to hold shares in the Company. When buying or selling shares directors are expected to strictly observe the provisions of the Company's Articles of Association and all relevant legislative and regulatory procedures.

Confidentiality

All information acquired during your appointment is confidential to the Company and should not be disclosed either during your appointment or following termination (by whatever means) to third parties except as permitted by law and with prior clearance from the Chairman.

We look forward to your association with us.

Thanking You,

For _____________Private Limited

Name of Director/Chairman/Managing Director

Designation:

DIN No.:

Acknowledgement

I have read and agree to the above terms regarding my appointment as an Additional Director of the Company.

Name of Director/Chairman/Managing Director

DIN No.:

Date:

Form DIR-8
Intimation by Director

[According to Section 164(2) and rule 14(1) of the Companies (Appointment and Qualification of Directors) Rules, 2014]

Registration No. of the Company: _______________

Nominal Capital: ____________

Paid Up Capital: ____________

Company Name: ____________

Address of Registered Office: ___________________

To,

The Board of Directors,

Company Name.

I, ________ son/daughter/spouse of ______ resident of ______, being a director in the Company hereby give notice that I am/was Director in the following Companies during the last 3 years

I further confirm that I have not incurred disqualification under section 164(2) of the Companies Act, 2013 in any of the above Companies, in the previous financial year, and that I, at present, stand free from any disqualification from being a Director.

For, Company name and seal Date:

___________ (Signature & Seal of Director)
Place:
___________ (Name of Director)
__________ (DIN No.)

Board Resolution in case of appointment of Director

CERTIFIED TRUE COPY OF THE RESOLUTION PASSED AT THE MEETING OF THE BOARD OF DIRECTORS OF (COMPANY NAME) HELD AT THE REGISTERED OFFICE OF THE COMPANY AT (ADDRESS) ON (DATE) AT (TIME)

RESOLVED THAT according to the provisions of section 161 of the Companies Act, 2013 and in terms of the Articles of Association of the Company, (Mr./Ms. Director Name), who has signified his/her consent in the Form DIR-2 if appointed, to act as a Director of the Company, be and is hereby appointed as an additional director of the Company.

FURTHER RESOLVED THAT to give effect to this resolution, Mr_____________________, Director of the Company be and is hereby authorized to do all acts, deeds, matters and things as deem necessary, proper or desirable and to sign and execute all necessary documents, applications and returns along with the filing of necessary E-form with the Registrar of Companies.”

For (COMPANY NAME)

(Director Name)