One Person Company – What It Can Provide And What It Can Not

One Person Company – What It Can Provide And What It Can Not

The Companies Act 2013 heralded a massive change in the nature of company incorporation. It allowed the establishment of a single person or one person company. 

 Pre-2013, A Single Person Couldn’t Incorporate A Company 

A new concept has been introduced in the Company’s Act 2013, about the One Person Company (OPC). In a Private Company, a minimum of 2 Directors and 2 Members are required whereas in a Public Company, a minimum of 3 Directors and a minimum of 7 members. A single person could not incorporate a Company previously.

Companies Act 2013 Made It Possible

One Person Company (OPC) is a company incorporated by a single person. Before the enforcement of the Companies Act, 2013, a single person could not establish a company. If an individual wanted to establish his business, he/she could opt only for a sole proprietorship as there had to be a minimum of two directors and two members to establish a company.

Now, A Company Can Be Formed With One Director, One Company 

As per Section 2(62) of the Company’s Act 2013, a company can be formed with just 1 Director and 1 member. It is a form of a company where the compliance requirements are lesser than that of a private company.

You may also like to read about Sole Proprietorship Firm.

Single Person Companies Enjoy Sole Proprietorship 

The Companies Act, 2013 provides that an individual can form a company with one single member and one director. The director and member can be the same person. Thus, one person company means one individual who may be a resident or NRI can incorporate his/her business that has the features of a company and the benefits of a sole proprietorship.

The Strengths Of OPC

Legal status

The OPC receives a separate legal entity status from the member. The separate legal entity of the OPC gives protection to the single individual who has incorporated it. The liability of the member is limited to his/her shares, and he/she is not personally liable for the loss of the company.  Thus, the creditors can sue the OPC and not the member or director.

Funds Can Be Easily Obtained

Since OPC is a private company, it is easy to go for fundraising through venture capitals, angel investors, incubators etc. The Banks and the Financial Institutions prefer to grant loans to a company rather than a proprietorship firm. Thus, it becomes easy to obtain funds.

Fewer Compliances

The Companies Act, 2013 provides certain exemptions to the OPC with relation to compliances. The OPC need not prepare the cash flow statement. The company secretary need not sign the books of accounts and annual returns and be signed only by the director.

More Convenient incorporation

It is easy to incorporate OPC as only one member and one nominee is required for its incorporation. The member can be the director also. The minimum authorised capital for incorporating OPC is Rs.1 lakh but there is no minimum paid-up capital requirement. Thus, it is easy to incorporate as compared to the other forms of company.

More Easily Manageable

Since a single person can establish and run the OPC, it becomes easy to manage its affairs. It is easy to make decisions, and the decision-making process is quick. The ordinary and special resolutions can be passed by the member easily by entering them into the minute book and signed by the sole member. Thus, running and managing the company is easy as there won’t be any conflict or delay within the company.

Perpetual Succession

The OPC has the feature of perpetual succession even when there is only one member. While incorporating the OPC, the single-member needs to appoint a nominee. Upon the member’s death, the nominee will run the company in the member’s place.

You may also read about Partnership Firms

The Disadvantages Of OPC

Suitable To Small Businesses Alone

OPC is suitable for small business structure. The maximum number of members the OPC can have is one at all times. More members or shareholders cannot be added to OPC to raise further capital. Thus, with the expansion and growth of the business, more members cannot be added.

Business Activities Are Curtailed

The OPC cannot carry out Non-Banking Financial Investment activities, including the investments in securities of anybody corporates. It cannot be converted to a company with charitable objects mentioned under Section 8 of the Companies Act, 2013.

Ownership And Management

Since the sole member can also be the director of the company, there will not be a clear distinction between ownership and management. The sole member can take and approve all decisions. The line between ownership and control is blurred, which might result in unethical business practices.

Also read about The Shop And Establishment Act.


About The Name Change & Address Change Of A Company

About The Name Change & Address Change Of A Company

The Name Is Our Identity, Address Is Our Locality 

Name defines our identity. Address defines our locality. Both are highly integral to our presence and our finite existence. Without name and address, we are nowhere.  Human civilization is a highly integrated and well networked socio-interpersonal structure.  One can find anyone, anywhere, all the time, because we have created a world where basically everyone is interconnected to everyone else, directly or indirectly.  

Now, when we come to the happening world of business companies, there are various laws and procedures that govern the decision & action of a company to  change its name. 

Also read Company Changing Its Activity - The Karmic Reorientation Of A Corporate Body

Company Name Change 

The name of a private limited company may have to be changed for a number of reasons including change of objective of the business, change of management, rebranding, etc., The name of a private limited company can be changed at anytime with the approval of the shareholders and Ministry of Corporate Affairs (MCA).

Private Limited Company Name Change

The name adopted by a private limited company during incorporation can be changed later. To change the name of a private limited company, the consent of the shareholders through a special resolution and MCA approval are required. The change of name of a private limited company has no impact on its legal entity or its existence as a corporate entity. The change of name of a company will not create a new company or new entity. Therefore, the change of company name shall NOT:

  • Affect any rights or obligations of the company

  • Render defective any legal proceedings by or against the company

  • Not affect any legal proceedings by or against the company and pending in the old name; they may continue in the old name.

  • Procedure for Private Limited Company Name Change

  • Procedure to Change/Alter name of company under companies act, 2013

Board Resolution

A Board meeting must be convened to pass a resolution for change of name of the company and to authorize a Director or Company Secretary to make an application to the MCA for ascertaining availability of proposed name. At the same Board meeting, a resolution to convene an extraordinary general meeting for changing the name of the company, and altering the Memorandum of Association and Articles of Association can also be passed.

Also read Profession Is The Link Between An Individual And The Larger Society.

Check Company Name Availability

Once a resolution is passed ascertaining availability of proposed company name, the authorized person can make a name application to the MCA. The procedure for name application is similar to that of the name application procedure followed during incorporation of a private limited company. Therefore, the name must be as per the Companies Act 2013 Naming Guidelines.

Pass Special Resolution for Company Name Change

Once a name is approved by the MCA, the Company must conduct an extraordinary general meeting and pass a special resolution for change of company name, and consequential changes to the Memorandum of Association and Articles of Association.

Application for approval of Company Name Change

Once the special resolution for change of company name is passed, the special resolution and application for approval of company name change must be filed with the Registrar of Companies. An application for company name change must be made in Form 1B along with the requisite fee.

Issuance of New Certificate of Incorporation

If the Registrar of Companies is satisfied with the company name change application, the Registrar would issue a new certificate of incorporation. It is important to note that the company name change is said to be complete and effective on issuance of new incorporation certificate by the Registrar of Companies.

Make Changes to MOA and AOA

Subsequent to the issuance of the new incorporation certificate, steps must be taken to incorporate the new company name in all the copies of Memorandum of Association, Articles of Association and Certificate of Incorporation issued by the Registrar.

Name should be desirable

As per the Companies Act, 2013, no company is to be registered with an undesirable name. A proposed name for a private limited company is considered to be undesirable if it is identical with or closely resembling with a name of a company in existence or approved by the Registrar, name of a LLP in existence or approved by the Registrar and/or resembles a registered trade-mark or trade-mark application. Further, names that are in violation of the provisions of Emblems and Names and/or names that contain profanity or words or phrases that are generally offensive to any section of people are also deemed undesirable and not allowed.

Names that require approval from other authorities
If the proposed name includes words such as ‘insurance, ‘bank’, ‘stock exchange’, ‘venture capital’, ‘asset management’, ‘mutual fund’, etc., the name may be allowed with a declaration by the applicant that the requirements mandated by the respective regulator such as IRDA, RBI, SEMA, etc., has been complied with by the applicant. Also, if the proposed name contains any word or expression which is likely to give the impression that the company is in any way connected with, or having the patronage of, the Central Government, any State Government, or any local authority, corporation or body constituted by the Central or any State Government under any law then the previous approval of Central Government has to been obtained.

Address Change Of A Company 

What is the procedure for changing a registered office address?
The procedure for a change in the registered office of LLP or a company is mentioned below-

change in registered office address within the local limits of the city, town or village

With a board resolution
By filing Form INC- 22 within 30 days of the Board Resolution
change in the registered office of the company outside the local limits of the city, town or village- but within the same RoC and the same state

With a board resolution and a special resolution
By filing Form MGT-14 within 30 days of the Special Resolution
By filing Form INC- 22 within 30 days of the Special Resolution
Change in registered office address from one RoC to another within the same state

With a board resolution, a special resolution and the approval from the Regional Director
By filing Form MGT-14 within 30 days of the Special Resolution
By filing Form INC- 23
By filing Form INC- 28 within 60 days from the order of the Regional Director
By filing Form INC- 22 within 30 days from the order of the Regional Director
change of address from one state to another, outside the existing RoC jurisdiction

With a board resolution, a special resolution and the approval from the Regional Director
After a necessary alteration in the Memorandum of Association (MoA)
By filing Form MGT-14 within 30 days of the Special Resolution
By filing Form INC- 23, after at least 1 month of publishing newspaper Ads ( as per Form INC -26) and serving notices to the creditors
By filing Form INC- 28 within 30 days from the receipt of the order of the Regional Director
By filing Form INC- 22 within 30 days from the order of the Regional Director
Necessary alteration is required in the Memorandum of Association (MoA)
With Vakilsearch, you can change the registered office address in the following way –

3 Working Days

If you're moving to the office to another state, we will draft the resolution for you and inform you of the procedure before you can inform the state government of the change.

4 Working Days

Within 30 days, you must inform the MCA by submitting the necessary forms that you have changed the Office address of the business.

You may also read Closing A Pvt Ltd Company - The End Should Be Smoother.


Company Changing Its Activity - The Karmic Reorientation Of A Corporate Body

Company Changing Its Activity - The Karmic Reorientation Of A Corporate Body

The Primary Importance Of Actions & Efforts 

"Your karma decides your destiny", goes the wise-old saying. It establishes the prime importance of our day-to-day actions. As nobody and nothing can exist without performing any action, so we are always bound by the actions. Various scientists have also proved beyond doubt that there are massive (atomic & molecular) movements going on inside the seemingly inert stones and sands. Change is written in the DNA of everyone and everything, in this world or perhaps the entire Universe.  

You may also like reading About The Name Change & Address Change Of A Company.

Can A Company Change Its Area Of Activity?

And when we talk about the primary human world, the arena of people and its materialistically significant part, the economy, businesses & commerce, the law of existence doesn't change much. There are various types of companies in the oceanic world of business & economy, some which have only one core area for production and/or sale, others which have presence across multiple segments of human needs and necessities. Now, if a company wishes to expand or change its (segment) range of production and sales, what it should do. Following is the detailed answer to this question: 

The Memorandum of Association (MOA) is a constitutional document of the company that helps to bring change in a business activity. It consists of five clauses as listed below.

Name clause – It is the first clause in the MOA. It provides the name of the company. From the name of the company, one can come to know whether the company is a Private Limited Company or a Public Limited Company.

Registered office clause – It shows in which state the company is located.

Object clause – From the object clause, one can get information about the business activity of the company. It shows the purpose of the company.

Liability clause – It shows the liability of the members of the company. It can be limited by shares or guarantee.

Capital clause – Companies having share capital will show the total authorized capital which is divided into the number of shares and the amount.

A Private Limited Company cannot conduct any business activity which is not mentioned in the object clause of the MOA. After Private Limited Company registration, if a company wants to start a new stream related to existing activity or a completely new activity, then it needs to alter or change the object clause in MOA.

Hence the company has to follow the procedure as specified under law to change the business activity of a company. For this, the company will require the approval from the shareholders by passing a resolution.

The Various Situations Where A Company May Want To Change Its Activity 
How to change a business activity of a Company
If a company wants to expand the business
If a company takes over another company with different business activity
If a company want to start a completely different business
If the government prohibits the current business activity under any law. 

You may also read The Shop And Establishment Act - The Law That Governs Indian Businesses.

Pass a resolution in a board meeting
A board meeting must be called to approve the new object clause by the directors. The BOD may decide a date and time to call an Extraordinary General Meeting to take approval from shareholders. Further, BOD may authorize any of the directors to file all required forms with MCA. The notice for the EGM must be sent to all the shareholders at least before 21 days from the date of EGM.

Pass a special resolution in Extraordinary General Meeting
The company must call an EGM at a specified date and time. To change the object clause in MOA, shareholders must pass a Special resolution. For companies that are not a Private Limited Company or issue capital through prospectus, then the company must pass a special resolution by postal ballot for change in business activity.

Also read Know About The Founders Agreement.

Filing of form with MCA
A company shall file the form MGT-14 for the special resolution passed in the extraordinary general meeting. The form must be filed with the MCA within 30 days from the date of resolution. The process ends when the company receives approval from MCA.

Following documents must be attached with the form;

A true copy of a board resolution
Notice of EGM
A true copy of a special resolution
Altered MOA
Alteration of MOA
The company after receiving approval from the MCA must alter every copy of the Memorandum of Association. The company can start new business activities after receipt of approval from the MCA.

Be compliant with all the rules and regulations to avoid any consequences. The company must update MCA by filing forms from time to time as and when required such as a change in registered office, business activity, capital, etc. Otherwise, the company, as well as the officers in default, will be liable for the penalty.


Changing of the activity by a company is unusual, from a macro perspective but it is much more prevalent from a micro perspective. Laws are made to make this process easier and less prone to hassles. 



Closing A Pvt Ltd Company - The End Should Be Smoother

Closing A Pvt Ltd Company - The End Should Be Smoother

Everything In This World Has A Life Cycle 

All good things do come to an end. Or we can say, everyone and everything in this world has a lifecycle. There is nothing which is permanent, anywhere, everywhere. The same holds true for the companies. Some thinkers have compared companies with countries. Like any country has a constitution, companies have Mission and Vision statements and various other rules and regulations. Like in a country, the goal of the government is to make its citizens grow individually & collectively, soi also in a company individual growth is synchronized with the collective growth. 

But one fundamental difference is, even the most short-lived nation states live far beyond at least 90 per cent of all companies. The termination and closing of a company  may be necessitated by a host of factors.  Let us know about the aspects involved in the closing of a company in the context of the Republic of India. 

Also read About The Name Change & Address Change Of A Company.

The Various Channels Of Closing A Company 

Running a business comes with its own challenges. Sometimes when things do not work out a business may have to be shut down. There can be several reasons to close or wind up the company. Here are four ways in which a private limited company can be closed. So, In this article we cover the following topics:

When The Company Is Sold Out
To sell off a Private Limited Company is also a kind of voluntary winding up. It can be done by selling shares of the company (selling the majority shareholding of the company). Technically speaking it is not an actual winding up but the stakes are transferred to another person or entity and the majority shareholders are discharged of their stocks and responsibilities.

Read Company Changing Its Activity - The Karmic Reorientation Of A Corporate Body

Mandatory Winding Up
Any company registered in India under the Companies Act, which did an unlawful act, fraudulent act or even if they contributed any action in some fraudulent or unlawful activities then such company would be wound up compulsorily by the Tribunal.

Winding up a company involves the following steps:

Filing of a petition
The petition will be filed by the following:

  • The Company or

  • The Trade Creditors of the Company or

  • Any contributory or Contributors to the company or

  • Any or all of the above mentioned three categories or

  • The Central or State Government or

  • By the Registrar of the CompaniesThe petition should be in Form WIN 1 or WIN 2 and should be submitted in triplicate. The petition shall be accompanied by an affidavit in Form WIN 3.

The Company's State of Affairs

All the documents accompanied by petition should be audited by a practising CA and the opinion given by the Auditor on the Financial Statement must be unqualified. The statement of affairs should be in Form WIN 4 in duplicate, which should be verified by an affidavit in Form WIN 5.

Advertisement for a minimum of 14 days
The Petition should be advertised in a daily journal at least for 14 days and the language of the advertisement should be in the Regional language (Regional Language of the area) and in English. The advertisement must be carried out under Form 6.

Proceedings of the Tribunal
The Tribunal will hear the petition on the date fixed for hearing, accept objections and replies from the petitioner and respondent. The Tribunal may appoint a provisional liquidator. The order appointing provisional liquidator shall be made in Form WIN 8. The order of winding up shall be made in Form WIN 11. The order of winding up shall prescribe:

  • The duty of such persons to submit the complete audited books of accounts up to the date of the order.

  • Provide the date, time and place for the Company Liquidator.

  • Surrender the assets and the documents of the assets to the Company liquidator. Upon a winding-up order, the Company liquidator shall take into custody all properties and effects, actionable claims and the books and papers of the company.

  • The Company liquidator shall submit a report to the Tribunal within 60 days of the date of the winding-up order.

  • After the affairs of the company have been completely wound up, the Company Liquidator shall make an application to the Tribunal for dissolution of the company. If the tribunal finds it just and reasonable in the circumstances of the case that an order for the dissolution of the company should be made, make an order that the company be dissolved from the date of the order. The company shall be dissolved accordingly.

  • The Company liquidator shall within 30 days of the date of the order, forward a copy of the order to the registrar.

If the tribunal finds the accounts are in order and all the required compliance have been satisfied, the tribunal would pass the order for dissolving the company within a period of 60 days of receiving the application. After the order has been passed by the tribunal, the registrar will then issue a notice to the Official Gazette stating that such company is dissolved.

Voluntary Winding Up
Winding up a company voluntarily require long procedural compliance to follow. There are certain mandatory requirements that have to be completed to close down a company voluntarily. A company can be wound up voluntarily in the situations mentioned below:

The company passes a resolution in its general meeting upon the expiry of the duration for which it is formed, or upon the occurrence of any event in respect of which the articles provide for its dissolution.
The company passes a special resolution (with approval of at least 3/4th of the shareholders) for a voluntary winding up of the company. The voluntary winding-up commences from the date of passing of the resolutions mentioned above. The company should also appoint a Company liquidator in the same meeting. Such an appointment should also be confirmed by a majority of the creditors (in terms of value) of the company.
Voluntary winding up involves the following steps:

  • The company passes a resolution in their general meeting as mentioned above. However, the majority of directors must agree for winding up.

  • The consent of the Trade Creditors is also required to wind up the company. Trade Creditors has to give their approval that they don’t have any obligation if the company gets wound up.

  • The Company has to make a Declaration of Solvency and the same must be accepted by the trade creditors of the company. The Company must show the Company’s credibility in the Declaration of Solvency.

  • The liquidator so appointed will carry out the winding-up proceedings and prepare a report of the winding-up on the assets, properties, debts and so on. The report shall be laid before the general meeting of the company for approval and passing a resolution for dissolution of the company. The Company liquidator shall send a copy of the final accounts of the company and resolutions to the ROC

  • The Company liquidator shall also make an application to the Tribunal for an order of dissolution of the company. Upon being satisfied with the winding up, the Tribunal shall pass an order of dissolution within 60 days of the application. A copy of the final order should be filed with the ROC.

  • All the above-mentioned procedures shall be presented and filed in a prescribed form and even after the company gets wound up then also company’s name shall be prohibited for 2 years to be taken by any other applicant.

The format for various forms and detailed procedure for winding up is prescribed in Companies (Winding up) Rules, 2020.

Winding Up Of  A Defunct Company 
As per the Companies Act, 2013, a Defunct Company is a company that has gained the status of a Dormant Company. The government provides certain relief to such defunct or dormant company because there are no financial transactions undertaken by dormant companies.

The Companies Act, 2013 laid down the procedure for winding up a Defunct Company. A Defunct or Dormant Company can be wind up with a fast-track procedure that requires submission of the STK-2 form. Hence, Form STK-2 is required in order to wind up a Defunct Company and there is no additional procedure for that. The form STK-2 needs to be filled with the Registrar of Companies and the same needs to be duly signed by the director of the company authorized by its board to do so.

For the purpose of this scheme, a defunct company refers to a company that has:

  • No asset and no liability, and

  • Which has not commenced any business activity after its incorporation or.

  • Has not been carrying on any business activities since last one year prior to making an application under FTE (Fast Track Exit Scheme).


Laws pertaining to the closing of a company ensure that ending is smoother and easier. 

You may also read The Legalities Pertaining To The Appointment Of A New Company Director

The Removal Of A Company Director - Many Changes Are Painful

The Removal Of A Company Director - Many Changes Are Painful

Change Is The Road To Development 

"Every change is painful", said one of the most prominent personalities of this millennia, namely Karl Marx. This premise speaks volumes about the difficulties which are caused when something big has to change. But then, common logic tells us that change is also inevitable. In fact, it is a must for variability. Or else life and movement will dwindle, which can lead to lifelessness and entropy.

The Changing Of Company Director Is No Exception To The Above Rule 

This logic also applies to the hip and happening world of business, a field of human activity which lies at the base of the economy, which in turn is the factor which fuels civilization and the society. So, in creation, emergence, consolidation and dissolution of companies, there will be points of time when we will have to make big changes. One of these changes is the removal of a director from his/her post. 

Also read about The Unique Identity Of A Company Director As Per The Company Law

Removing The Company Director 

Every private company has to have a minimum of two directors, and any public company has to have at least three directors at any given time. Let us look at three possible cases during the removal of a director:

1) When The Director Himself/Herself Submits his/her Resignation

The concerned director submits his resignation to the Board. In this case, the following steps will be taken to remove his name from the register of directors:

The company will hold a Board Meeting by giving seven days of clear notice (Clear notice means 21 days notice excluding the day on which the notice was sent and received.

When the Board meets, they will discuss amongst themselves and decide whether to accept the resignation or not.

Once the Board accepts the resignation of the director they will pass a Board resolution accepting the resignation in the following format:

“RESOLVED THAT the resignation of Mr. XYZ be and is hereby accepted with immediate effect
“FURTHER RESOLVED THAT the Board places on record its appreciation for the assistance and guidance provided by MR. XYZ during his tenure as Director of the Company”

“RESOLVED FURTHER THAT directors of the company be and are hereby jointly authorized to do all the acts, deeds and things which are necessary to the resignation of the aforesaid person from the directorship of the Company
After the passing of the resolution, form DIR – 11 has to be filed by the outgoing director along with the Board Resolution, Proof of delivery of the resignation letter and a copy of the resignation letter.

While the filing of DIR – 11 is the responsibility of the director, form DIR – 12 is the responsibility of the company which has to be filed with the Registrar of Companies along with the Resignation letter and the Board Resolution.
After filing all the forms, the name of the director will be removed from the master data of the Company on the Ministry of Corporate Affairs website.

You may also like reading Know About The Annual Compliance Filings For LLPs.

2) When The Board Removes The Director Suo-moto

A Company has the authority to remove a Director by passing an Ordinary Resolution, given the Director was not appointed by the Central Government or the Tribunal.

A Board Meeting will be called by giving seven days’ notice to all the directors. A special notice will go to the directors informing them about the removal of the director.

On the day of the Board Meeting, a resolution for the holding of an extraordinary general meeting will be passed along with the resolution for the removal of the director subject to the approval of the shareholders.

A general meeting will be held by giving 21 days clear notice. In the meeting, the members will be asked to vote on the matter. If the majority is in favour of the decision, the resolution will be passed.

Before the passing of the resolution, an opportunity of being heard will be given to the director.

After the passing of the resolution, the same procedure will be followed, and the forms DIR – 11 and DIR – 12 will be filed along with the same attachments of the Board Resolution, Ordinary Resolution.
After the filing of the forms, the name of the director will be struck off from the Ministry of Corporate Affairs website.

3) When the Director Does not Attend 3 Board Meetings in a Row

As per section 167 of the Companies Act, 2013 if a Director does not attend a Board Meeting for 12 months, starting from the day on which he was absent at the first board meeting even after giving due notice for all the meetings, it will be deemed that he has vacated the office and a Form DIR – 12 will b filed on his name and his name will b removed from the Ministry of Corporate Affairs.


The removal of a director from the company is a big corporate development and thus there are special laws to tackle the same.  

You can also read About Increasing The Authorised Capital Of The Company

The Legalities Pertaining To The Appointment Of A New Company Director

The Legalities Pertaining To The Appointment Of A New Company Director

The Significance Of The Leader In A Group 

No entity can exist efficiently & effectively without the existence and prevalence of a formal or official leader.  The same holds true for a company director. The director (or the directors) of a company lead the company through thick and thin. They motivate the company officials, personnel and staff towards meeting the vision and mission of a company. 

Also read The Unique Identity Of A Company Director As Per The Company Law.

The Decision To Change A Director/Appoint A New One In A Pvt Ltd Company 

In case, a company has to choose its new director and change an existing one, it is a big decision and involves various legal and other formalities and rituals.  As an existing director leaves and a new one comes up, it translates into a lot many changes. So, the company law has laid down various legalities and procedures while a company effects such a change. 

In Private Limited Company Directors plays main role in its functioning, Directors takes day to day decisions for business operations, Directors are key person in whom Shareholders of company trusts for their money invested, here in this article we will discuss about how a company can have new Director on its Board legally in India

You may also read The Removal Of A Company Director - Many Changes Are Painful

The Proposed Director Should Give His/Her Consent 

The proposed director should give his/her consent to act as Director in the Company as per Form DIR-2 , this is very important document and company must obtain form DIR-2 form before proposing him/her as the Director of the Company. 

Proposed Director Should Give His/Her Digital Signature

If proposed Director does not have Digital Signature , he must obtain Digital Signature from Certifying Authority in India.

Procure The Director Identification Number (DIN)
If the proposed Director does not have DIN , he should let the company know that he does not have ,and than the Company in which he is about to be appointed as Director is required to pass Board Resolution for proposing him to be Appointed as Director of the Company , the company should apply for DIN no of the proposed person. The Resolution is required to be attached with Form DIR 3.  ( This is new requirement for obtaining DIN , as new person cannot just apply for DIN if he is not to be appointed as Director in any Company. DIN is only allotted once for lifetime of Director.   

The Company should obtain all KYC documents along with necessary educational Qualification documents required as per terms of job, it is important to note that there is no minimum education qualification required to hold position of Director in the Company in India

A General Meeting Notice Should Be Issued 
The Director in the Company are appointed in the General Meeting , the Company should issue notice to all the Shareholders of the Company for holding Extra Ordinary General Meeting of the Company, Please note that Notice of General Meeting should be issued in accordance with provisions of Companies Act, 2013 and rules made there under and Secretarial Standards issued by Institute of Company Secretaries of India (ICSI).

An Extra Ordinary General Meeting of the Company Should Be Organised
Once the Notice of EGM is issued to the shareholders , now on the meeting date and time , hold the meeting and Pass the Necessary Resolution for Appointment of Director as Company.

Letter of Appointment Should Be Issued 
Now issue letter of appointment to the Director of the Company mentioning terms and conditions of appointment and salary to be payable to the Director.

File form DIR-12 to ROC
Once all the above steps are completed the Company should file Form DIR-12 to ROC within 30 days form the date of appointment of Director , It is always advisable to File the Form DIR-12 within next day of appointment, so as to avoid late filing and Additional Fee.

Make Required Entries In Register of Directors
Company should make necessary entries in the Register of Director and Key Managerial Personals. 

File Necessary Amendment Application to GST, Tax Authorities  Other regulators
The Company is required to make necessary application for Changes in Directors details in GSTN and Other Certificates, wherever applicable. 

Also read Know the various facts about Share Purchase Agreement


Changing a company director should be a smooth and natural process. It should not create disturbances, disruptions and ripples of disharmony or at least these things should be minimized.