Addition of Directors
Addition of Directors can be made at any time in any Company, there are several category of Directors such as Whole Time Director, Independent Director, Professional Director, etc. Some of the category of Directors appointment is mandatory as per Companies Act 2013 based upon the size of Turnover and Capital of the Company.
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There are many types of Directors as per Companies Act 2013, as the company grows, depending upon the nature and size of organisation the company need to appoint and absorb more directors on their board in order to ensure smooth functioning of the organization.
Addition of Directors in a Company can be done by appointing him / her as Director on the Board. This appointment of director can be as per the type of director:
Various types of Directors as per Companies Act 2013 are:
- Executive Director: An executive Director can also be whole time director if such director provide substantial time in the day-to-day routine activities of the business. An executive director can also be a Managing Director.
- Non Executive Director: A non executive director is a director who is neither a whole time director nor a managing director.
- Residential Director: Every Director whose total period of stay in India is more than 182 days in the previous year is considered as resident director. As per the Companies Act 2013, every registered company shall have at-least one residential director.
- Independent Director: A Director who is other than Managing Director, Whole time Director or nominee director shall become independent director. Every company whose paid up share capital is INR 10 crore or more or turnover having INR 100 crore or more or total outstanding loans and advances having more than INR 50 crore shall appoint at-least two independent directors. An independent director shall not be related to promoters or directors of the company, shall not hold more than 2% of the paid up share capital along-with its relatives. An independent director shall hold office upto a tenure of 5 consecutive years.
- Small Shareholders Director: Every listed company shall appoint a small shareholders Director from amongst their small shareholders. Small shareholders are holders holding 1/10th of total shareholding of the company.
- Woman Director: All such companies having paid up share capital of INR 100 crore or more or having turnover of INR 300 crore or more shall appoint at-least one woman director on their board.
- Additional Director: Any individual can be appointed as additional director.
- Alternate Director: If the Articles of the company permit, any company can appoint alternate director in place of director who remain absent from India for at-least 3 months. An alternate director shall cease to hold office once the original director returns to India. An alternate Director can-not hold office for tenure more than as specified for the original director.
- Nominee Director: A nominee director can be appointed by any third party through contracts or by Lending Public financial institution or bank or by Central Government in case of oppression or mismanagement.
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