Day-to-day affairs of a company are run by its directors and employees. The companies act recognizes the board of directors and key managerial personnel in the company as the persons responsible to execute the activities of the company. The Companies Act, 2013 fixes the minimum and maximum number of directors a company can appoint. Under the 2013 Act, a private company is required to appoint at least two directors; while a public company must appoint at least three directors and a one person company is required to appoint at least 1 director. A company can appoint a maximum of 15 directors. It is possible for a company to increase the number of directors beyond 15 by passing a special resolution to this effect. Moreover, one of the directors of the company must be resident in India, that is, he must have stayed in India for a period of not less than 180 days in the previous calendar year.
Term of appointment of directors
Generally a director is appointed in the Annual General Meeting (AGM), and can hold the post till the next AGM. However, the articles of the company can provide for appointment of permanent directors in the articles of the company. In case of a public company or its subsidiaries, only one-third of the directors can be appointed as permanent directors, rest of the directors must retire by rotation at the AGM of the company.
An independent director can be appointed for a period of consecutive five years. Such directors can be re-appointed after passing a special resolution by the Board for a period of another 5 years. After two consecutive terms, an independent director can be re-appointed only after a gap of three years (provided that the person was not appointed or associated with the company during these three years).
Resignation and removal of directors
A director can by giving a notice in writing to the company and the board, resign from the post of director. The effect of resignation will take place from the date when such notice has been received by the company or on such date as the director has conveyed to the company, whichever is later. Moreover, a director must convey the notice of resignation along with reason for resignation to the Registrar in Form No DIR-11 within thirty days from the date of resignation. The company in a similar manner has to inform the Registrar and post the information on the website of the company about the resignation of the director within thirty days from the date of notice of resignation in Form No DIR-12.
Very informational post, I just wanted to know how many directors can a private limited company have? Kindly reply.