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Death of a director and Appointing to New director

RAJA P M ("Do the Right Thing...!!!") (128091 Points)

25 August 2020

Dear Experts.,

In a Private limited company have Two directors. On 19/08/2020 one of the director is dead. Now, Only one director in live. He think to appoint a director from another person from family of death director...

My question is :

What is the time limit for appointing another director in this situation...?

Please reply... Thanks in advance

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1 Replies

Sagar Patel (Tax and Business Consultant) (11611 Points)
Replied 25 August 2020

Section 174(2) of the Companies Act, 2013 which allows continuing director(s), even if their number are below statutory limit, to do following two act

1. They can increase the number of director up to the number of fixed quorum

2. They can summon a general meeting

Section 174(2) has clearly stated remaining directors cannot act for any other purpose except above two. Articles 69 of the Table F and article 21 of H forming ideal Articles of Association, also have similar provision with similar words.

Section 3A provides as follows:

If at any time the number of members of a company is reduced below statutory limit and the company carries on business for more than six months while the number of members is so reduced, every person who is a member of the company during the time, shall be severally liable for the payment of the whole debts of the company contracted during that time, and may be severally sued therefor.

So, As per Above, time limit for appointing another director is "6 MONTHS"

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