Director Appointment
Simplified Appointment of Managing Director in India
Ensure a smooth, legal, and hassle-free appointment of a Managing Director (MD) in India with Tax Pal Solutions. We provide end-to-end support, from drafting board resolutions to MCA compliance, ensuring your company meets all regulatory requirements efficiently.
Why Choose Our Service
- Drafting of Board & Shareholder Resolutions
- DIR-12, MR-1 & MGT-14 Filing Support
- Guidance on Companies Act Compliance
- MCA Verified Legal Experts
- Trusted by 20,000+ Businesses
What is a Managing Director?
A Managing Director (MD) is a senior executive on the Board of Directors who links strategic decisions to the company’s daily operations.
Key Roles:
- Represents the company externally to investors, partners, and authorities
- Oversees departments and guides senior management
- Implements company strategies and ensures operational efficiency
Is Appointment of an MD Mandatory?
- Not all companies require an MD.
- Public companies with paid-up capital ≥ ₹10 crore must appoint Key Managerial Personnel (KMP), which can include:
- Managing Director (MD)
- CEO, Manager, or Whole-Time Director
- Private companies may appoint an MD based on size, operations, and internal structure.
- Only one position exists: MD or Manager—not both.
Legal Provisions (Companies Act, 2013)
- Section 196: Appointment via Board and Shareholder Resolution
- Section 197: Governs remuneration
- Section 203: Relates to KMP appointment
- Schedule V: Central Government approval required if appointee doesn’t meet conditions
Tenure: Up to 5 years, reappointment allowed (cannot reappoint earlier than 1 year before expiry).
Roles and Responsibilities
- Strategic Direction: Develop long-term business strategies
- Operational Oversight: Manage day-to-day operations
- Financial Management: Monitor budgets, profitability, and risk
- Leadership: Build strong work culture and motivate employees
- Compliance: Ensure adherence to legal and regulatory norms
- Stakeholder Relations: Represent company to investors, clients, and authorities
- Reporting: Update Board of Directors on performance and challenges
Eligibility Criteria
| Criteria | Requirement |
|---|---|
| Age | 21–70 years (special resolution needed if >70) |
| Residency | Resided in India for ≥182 days in the preceding year |
| Mental Fitness | Sound mind, capable of handling director responsibilities |
| Financial Standing | Not an undischarged insolvent, not declared insolvent previously |
| Criminal Record | No conviction with imprisonment >6 months |
| DIN | Mandatory, issued by MCA |
| Disqualification | Must not be disqualified under Section 164 |
Appointment Process
Private Company
- Check AOA: Review Articles of Association for restrictions
- Board Meeting: Pass resolution approving MD appointment
- Agreement Execution: Formal service agreement detailing roles, remuneration, and terms
- ROC Filing:
- DIR-12: Appointment notification
- MR-1: MD/Manager remuneration (if applicable)
- MGT-14: Board/shareholder resolution filing
Public Company
- NRC Recommendation: Nomination & Remuneration Committee proposes candidate
- Board Meeting: Approve appointment and remuneration
- Form MGT-14 Filing: Board resolution filed with ROC
- General Meeting: Special resolution for shareholder approval
- Final ROC Forms Filing: DIR-12, MR-1, and MGT-14
- Update Statutory Registers: Register of Directors & KMP, Register of Contracts (Form MBP-4)
Documents Required
From Appointee:
- Identity & Address Proof (PAN, Passport, Utility bills)
- Passport-size photograph
- DIR-2 & DIR-8 forms
- DIN allotment letter (if applicable)
- Qualification/experience certificates
From Company:
- Board & General Meeting notices and minutes
- Letter of appointment / agreement
- MOA & AOA
- Board resolutions authorizing ROC filings
- Digital Signature Certificate (DSC) of authorized signatory
Legal Rules
- Term: Max 5 years; reappointment allowed
- Reappointment Procedure: Board & shareholder approval, filing necessary ROC forms
- Multiple MD Appointments: Allowed if no conflict of interest; salary limits under Section 197 must be observed
Drafting a Board Resolution
Key Elements:
- Approval under Sections 196, 197, 203, and Schedule V
- Terms of appointment, remuneration, and responsibilities
- Authorization for ROC filings and necessary acts
- Signature of authorized director/company secretary
Letter of Appointment – Key Components
- Company letterhead, date, and recipient details
- Appointment clause: Effective date, tenure, role
- Remuneration & benefits breakdown
- Working hours, leave, confidentiality, non-compete, termination clauses
- Governing law & jurisdiction
- Acceptance clause and authorized signatory
Penalties for Delayed ROC Filing
| Consequence | Details |
|---|---|
| Additional Fees | ₹100 per day of delay (Section 403) |
| Monetary Fines | Up to ₹1 lakh for non-compliance |
| Prosecution | Imprisonment up to 6 months in severe cases |
| Director Disqualification | Section 164(2): Non-filing for 3 consecutive years → 5-year ban |
Certification
