Who is eligible to be company director of a private limited company?

Hi,

In a private limited company who is eligible to be a company director? What are the common types of director profiles a private limited should have?

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Hi Anushree,

We principally exchange HR Compliances and relating concepts in this forum.

Directorship, qualifications, and appointment procedures come within the purview of Corporate Compliance that is governed by the Companies Act.

The provisions of the Companies Act are vast and we would suggest you consulting with a Company Secretary to deal with the compliance.

Just to brief a bit about the directorship in a private limited company:

A director has to be appointed to the Board of the Company (Board of Directors). There is no explicit qualification prescribed under the Companies Act, 2013 for appointing a Director, but Section 164 prescribes certain disqualifications for the appointment of directors. Where a person is disqualified under Section 164 he shall not be eligible to be appointed as a Director in a company.

Section 149(1) of the Companies Act, 2013 states that every company shall have at least three directors in case of a Public Company, two directors in case of a Private Company, and One Director in the case of One Person Company (OPC).

A company can appoint 15 directors maximum; if it intends to appoint more than 15, then a special resolution has to be passed in a general meeting of such a company.

As per Section 152(2) of the Companies Act, 2013 every director shall be appointed at the general meeting of the company, unless otherwise expressly provided in this act.

Conditions for Appointment

Only an Individual natural person can be appointed as a Director.

A person shall not be appointed as a director unless he has an active Director Identification Number (DIN).

A person shall obtain a Digital Signature Certificate (DSC) from certifying authority to be appointed as a director.

Every person proposed to be appointed as a director shall furnish his DIN and a declaration that he is not disqualified to be appointed as a director under the Companies Act, 2013.

Every person shall furnish his consent to act as a director in Form DIR-2 on or before his appointment.

A person shall not be eligible for appointment as a director, if he is disqualified as prescribed under Section 164 of the Companies Act, 2013.

A person shall not hold directorship in more than twenty companies at the same time including any alternate directorship. Further, the maximum number of public companies in which a person can be appointed as a director shall not exceed ten.

Regards,
Bhuvana Anand

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Anybody on whom the company has an interest can be its Director designated.
Thank you.

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