Meaning of Alternative Director

Alternative Director is aperson appointed by the Board of Directors for a period of not less than three months during the absence of Orginal Directors.Generally Alternative Directors are appointed for NRI’S or foreign colloborators of the company.

An Overview

They can be appointed if authorised by the Articles or by the Company in General Meeting.Section 313 of the Companies Act 1956 is applicable for both the public and the Private Company.The Board can appoint the Alternative Director if it is authorised by the Articles.The Apppointment can be made even through Circular Resolution if all the Directors are not in station.This Alternative Director will act as a Orginal Director altleast for a period of Three months and he shall vecate the office when the orginal Director comes back to the  state.Eform 32 shall be filed electronically in respect to the vecassion and the appointment of the Directors.Apointment of the Alternative Director is permit only when the strength of the Board members permits the same.

Board Resolution for appointment of Alternative Director.

"RESOLVED THAT pursuant to the provisions of Section 313 and other applicable provisions (including any modification or re-enactment thereof), if any, of the Companies Act, 1956, Mr…………………….. be and is hereby appointed as Alternate Director during the absence of Mr._______(Name of the original director) and that he will vacate the office when the original director, Mr._________ (Name of the original director) return to India, pursuant to article ________ of the Articles of Association of the Company.”  

RESOLVED FURTHER THAT any directors of the Company be and are hereby severally authorized to do all the acts, deeds and things which are necessary to the appointment of aforesaid person as alternate director of the Company.”

In case the Articles of Association of a Company does not have any provision for Appointment of Alternate Director(s)

“RESOLVED THAT pursuant to Section 313 and all other applicable provisions of the Companies Act, 1956, the Board of directors of the Company be and is hereby authorised to appoint an Alternate Director to act for a Director (hereinafter called 'the Original Director') during his absence for a period of not less than 3(three) months and an alternate director shall vacate his office as and when original director returns to the said state."

Explanatory Statement:

The Director(s) of the Company have been frequently travelling across the states for Business Purpose.In his absence another Director is required to handle the Business.Section 313 of the Companies Act, 1956 provides that the Board of directors of a company may, if so authorised by its Articles or by a resolution passed by the Company in general meeting, appoint an alternate director to act for a director during his absence from the State. Since the Articles of Association of the Company do not provide for the appointment of alternate director, the proposed resolution seeks the necessary authority of the general meeting to enable the Board of directors to appoint alternate director as and when necessity arises.

And once the above resolution is passed in the General meeting of the Members of a Company, thereafter the Board of Directors can appoint an Alternate Directors in their meeting.

Thanks N Regards

Sneha.K

Company Secretary