Appointment & removal of

Directors:
Introduction:

A director may be defined as a person having

control over the direction, conduct, management or
superintendent of the affairs of a company.

Only individuals can be directors. Nobody

corporate, association or firms can be appointed
directors of a company. Only an individual can be so
appointed.
Appointment of directors
(1)First directors:

(A) The articles of a company usually name the first

directors by their respective names or prescribe the
method of appointing them.

(B) If the first directors are not named in the articles,

the number of directors and the name of the
directors shall be determined in writing by the
subscribers of the memorandum.
To be continue….
(2) Appointment of directors by the company:

Directors must be appointed by shareholders in

general meeting.
In case of a public co. or a private co. which is
a subsidiary of a public co. ,at least 2/3rds of the
total number of directors shall be liable to retire by
rotation such directors are called rotational directors
& shall be appointed by the shareholders in general
meeting.
To be continue….
(3) By directors:
(a) As additional directors:
Any additional directors appointed by the
directors shall hold office only up to the date of next
annual general meeting of the company.

(b) As alternate director:

An alternate director can be appointed by the
board if it is so authorized by
- the articles of the company or
- a resolution passed by the company in the
general meeting.
To be continue….
(4) By third party:

The articles under certain circumstances give power

to the debenture holder or other creditors.

E.g.. A banking company or financial corporation,

who have advanced loans to the company to appoint
their nominees to the board.
To be continue….
(5) By central government :

 central govt. to appoint such number of directors on

the board of a company as the tribunal/committee
may, by order in writing, specify as necessary to
effectively safeguard the interests of the company or
its shareholders.
Removal of directors
(1) By shareholders:
 The shareholders may remove a director before
the expiry of his period of office by passing an
ordinary resolution.

(2) By Central government:

 The central govt. may, in certain circumstances
,remove managerial personnel from office on the
recommendation of the company law board.
To be continue….
(3) By tribunal:

when, on an application to the tribunal for

prevention of oppression or mismanagement , the
tribunal finds that the relief have to be granted, it
may terminate, or modify any agreement between
the company and the managing director or any other
director or the manager.
Thank you