Procedure for change of designation of director to md(pvt co

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

08 December 2014 Dear all,

For a Private Ltd. Company , I need to change the designation of a director already appointed in august 2014 into a managing director. I need to file form DIR-12 for intimating the change in designation. My queries are as follows :

1) Whether any attachment is required to be made for Form DIR-12 (as there is no such thing mentioned even in the Instruction Kit to DIR-12) ??

2) Whether any other forms like Form - MR-1 & MGT-14 are also required to be filed ?? (-in my opinion there is no need to file MR-1 & MGT-14 , as in this case there is no seperate appointment of director , a mere change of Designation of Dierctor)

kindly suggest me at the Earliest.

Thaanks & regards
Hari

CS Mitesh Mehta

CS Mitesh Mehta (Expert)
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08 December 2014 1) You have attach the following with DIR 12

1. Letter of appointment

2. Declaration of the appointee director in Form No. DIR-2

3. Interest in other entities of director If any

2) You have to file MR-1 & MGT 14

CS Divesh Goyal

CS Divesh Goyal (Expert)
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08 December 2014 yes am agree with answer of mr. mitesh mehta

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Querist : Anonymous

Querist : Anonymous (Querist)

09 December 2014 Dear Sir(s),

Thanks for ur kind replies. But what my doubt is , we are not appointing a new person as the Managing director. We are making a person who is already a director as Managing Director. So my point is , it comes to only a change in designation of director & a board resolution is sufficient to attach with the DIR-12 & also what is the requirement to file Forms MR-1 & MGT-1 ?? they are to be filed only when a person is appointed as a Managing director, but in the case der s no fresh appointment,just a mere change in Designation . Also being a Pvt. Ltd. company, der is no Limit on remuneration & no need to furnish remuneration details.
Finally, my query is whether a mere change in designation of the Director to MD is also considered as fresh appointment ??

Kindly clarify & suggest me considering the points given at the earliest.

..........................................................................................................

One more doubt relating to Appointment of Executive director in a PVT. Ltd. Co. :

1) Whether a person (not being a director in the company) can be appointed as an Executive director ?? & what the other directors want is, he should not be a director in the company ,but he should be appointed as an executive director for all the Official participation & taking care in the Administrative activities of the company. whether it is possible to do so ??

Asha Kanta Sharma

Asha Kanta Sharma

(Expert)
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10 August 2024 ### Changing the Designation of a Director to Managing Director in a Private Limited Company

When changing the designation of a director to a Managing Director (MD) in a private limited company, the procedure involves several steps and specific requirements. Here’s a detailed guide to address your queries:

#### 1. **Filing Form DIR-12:**

**Form DIR-12** is used to notify the Registrar of Companies (RoC) about changes in the designation of directors, including the appointment of a Managing Director.

- **Attachments Required:**
- **Board Resolution:** A board resolution is required to effectuate the change in designation. This resolution should specify the change in designation from Director to Managing Director and authorize the filing of Form DIR-12.
- **Declaration by Director:** The director being appointed as MD should provide a declaration stating that he/she is not disqualified to act as a Director under the Companies Act, 2013.
- **Copy of the amended Articles of Association (if applicable):** If the change in designation requires alteration in the Articles of Association (e.g., if the powers of MD are defined), an amended copy should be attached.

**Note:** Even though the Instruction Kit for Form DIR-12 does not explicitly mention attachments, it's essential to include the resolution and other supporting documents as these are typically required by the RoC.

#### 2. **Other Forms to be Filed:**

- **Form MR-1:**
- **Not Required in This Case:** Form MR-1 is used for the appointment of a Managing Director in a public company, particularly where the appointment is to be filed with the Registrar. Since this is a private company and you're merely changing the designation, MR-1 is not applicable here.

- **Form MGT-14:**
- **Not Required in This Case:** Form MGT-14 is generally used to file resolutions with the RoC. Since the change is in designation and not a new appointment, MGT-14 is typically not required unless there's a specific change in the Articles of Association or a special resolution is involved.

**Key Points:**
- Ensure that the board resolution and necessary declarations are appropriately documented and filed with Form DIR-12.
- As there's no fresh appointment but only a change in designation, there’s generally no need for MR-1 or MGT-14 unless other procedural or statutory requirements are triggered.

#### 3. **Appointment of Executive Director:**

- **Appointment of Executive Director:**
- **Possibility:** Yes, a person not currently a director can be appointed as an Executive Director. However, it's important to note that the title "Executive Director" is typically used for persons who are already part of the Board or have similar functions as a director, albeit with a specific focus on executive duties.
- **Designation and Authority:** The term "Executive Director" generally implies some level of authority similar to that of a director, but it does not require the person to be a Board member unless the company's Articles of Association mandate it.

**Steps for Appointment:**
1. **Board Resolution:** Pass a board resolution to appoint the person as an Executive Director, specifying their roles and responsibilities.
2. **Employment Agreement:** Draft and execute an employment agreement detailing the terms of their executive role.
3. **No Formal Filing Required:** If the person is not a director, there’s generally no need to file Form DIR-12 for their appointment. However, ensure that the company’s internal records reflect this appointment.

**Summary:**

- **For Changing Designation to MD:** File Form DIR-12 with the necessary attachments, including a board resolution and declaration by the director. MR-1 and MGT-14 are generally not required.
- **For Appointing an Executive Director:** A non-director can be appointed as an Executive Director with a board resolution and an employment agreement. There’s no need to file additional forms if they are not a board member.

If you have specific concerns or complex scenarios, consulting with a company secretary or legal professional might be beneficial to ensure full compliance with legal requirements.