Item: Draft Board Resolution For The Appointment of Additional Director
Author: Muhammed Fasil K

draft-board-resolution-for-appointment-of-additional-director

As per the provisions of Section 161(1) if the articles of a company permits, its Board of Directors has the power to appoint any person, other than a person who fails to get appointed as a director in a general meeting, as an additional director at any time who shall hold office up to the date of the next annual general meeting or the last date on which the annual general meeting should have been held, whichever is earlier.

Draft Board Resolution For The Appointment of Additional Director

"RESOLVED THAT pursuant to the provisions of Section 161 of the Companies Act, 2013 and other applicable provisions (including any modification or re-enactment thereof), if any, of the Companies Act, 2013 and Article ……. of AOA, Shri …………… be and is hereby appointed as an Additional Director on the Board of the Company w.e.f……………., who shall hold office upto the date of the ensuing Annual General Meeting of the Company".

"RESOLVED FURTHER THAT ……………….. be and is hereby authorized to do all the acts, deeds and things which are necessary for the appointment of aforesaid person as an additional director of the company.”

Important Points to be considered before the appointment of Additional Director

Unless the articles so provide, the Board cannot appoint additional directors. This applies to all companies, private and public. [See Needle Industries (I) Ltd v Needle Industries Newey (India) Holdings Ltd. AIR 1981 SC 1298: (1981) 51 Comp Cas 743 (SC)]

The election of a person by directors as a director entitles him to hold office till the next annual general meeting. [Gur Prasad Kapoor v Rameswar Prasad AIR 1933 All 344]

But the additional director so appointed will vacate his office (where the AGM is not convened) on the last day on which AGM could have been called as required by section 166 [now section 96]. [Krishnaprasad Jwaladutt Pilani v Colaba Land & Mills Co Ltd. (1959) 29 Comp Cas 273 (Bom)]

An additional director appointed as a managing director will continue to be a managing director upon his election as a full-fledged director at the AGM. [Clarification 8/212(160)-76/CL-V, dated 17 March, 1977]

An additional director does not retire by rotation at the next AGM and he is required to comply with the provisions of section 257 for seeking election as director at the said meeting. [Letter No. 8/16(1)/PR, dated 9 May, 1961]

Confirm whether the proposed additional director is having Directors Identification Number (DIN), if he is not having DIN, apply for obtaining DIN before making appointment as a director.

E-book on draft resolutions and procedures

Draft Board Resolution For The Appointment of Additional Director

Draft Board Resolution For The Appointment of Additional Director

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