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Add a Director having DSC and DIN to the Board of Directors.
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Resignation of a Director from the Board of Directors of a Company with resigning Directors’ consent.
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A Director of a Company is a person that is elected by the shareholders to manage the affairs of the company as per the MOA and AOA. As the company is an artificial person it can only act through the agency of a natural person. Thus, a director has to be a living person and the management of the company is entrusted to its Board of Directors. The appointment of the Directors can be required from time to time based on the requirements of the shareholders of the business.
A Director in a company may want to resign or the Board of Directors may want to remove the Director for several reasons. The Director of a company can also resign from the Board by filing a resignation letter with the company and also intimating the ROC with the same. Here, we will take a look at the procedure that a director needs to follow in case he wants to resign from the post of Director.
The ownership of a Private Limited Company in India is decided by the shareholding of the Company. For inducting new investors or transferring the ownership of the company the shares of the company need to be transferred. The company’s interest could be sold to attract new investors or to pass the control of the company.
The registered office of a company is a place where all the communication related to business is held. In addition to a registered office, a company can also have a corporate office, branch, factory, or administrative office. However, the registered office of a company in India must be registered with the Ministry of Corporate Affairs, the other branches and offices can be opened by a company without any prior intimation to the ROC.
Each business needs more funds over time to run business. These funds can be required on a long- and short-term basis. A short-term need can be satisfied by taking loans and advances. But for the run, the company will require more funds. For a Private Limited Company, this can be done by increasing the authorized capital of the company. Since the private limited company is governed and regulated under the Company Act to make changes in the structure it is necessary to follow the Act and the rules stated.
Winding up is the liquidation of Company’s assets which are collected and sold in order to pay the debts incurred. When the company winding up takes place firstly the debts, expenses and costs are paid away and distributed among the shareholders.
The LLPs are newly formed business entities that were introduced through the LLP Act,2008 in India. The Limited Liabilities enjoy the audit exemption if the annual turnover of the LLP is less than Rs40 lakh or the capital contribution is less than Rs.25 lakhs.
A Company can remove its directors before the expiry of its term, these powers are vested with the shareholders. Here we will talk about the process of removing the Directors of a Company. In case of Non-compliance with any one of these processes can make the decision void, if appealed in a court.
This process of removing the Director cannot be initiated without providing an opportunity to the Director who is to be removed. This is one of the basic requisites on the laws ordained which provides the defendant or the defaulter an opportunity of being heard.
This process of removing Directors must be initiated by a notice. This notice should be processed by the shareholders that have a minimum voting power of 1% or someone who holds shares on which an aggregate sum of not more than Rs. 5,00,000 is paid upon the date of the notice. This is a special notice that should be signed by all the members. This special note should be delivered to the Company at least 14 days before the meeting is held at which resolution will be passed. The notice won’t be valid if isn’t issued before three months of the date of the meeting.
The Director must be sent a copy of the Notice, who will be heard on the resolution at the meeting, whether the director is a member or not a member of the Company. The notice should be served at least seven days which is a week before the date of the meeting which is held.
If the shareholders are not able to deliver the notice it can be published in any two newspapers, one in English and one in the vernacular newspaper. The notice must be mandatorily posted on the company’s website again this should be done seven days before the date of the meeting.
The concerned director can make a representation against this removal notice. The director can request the company to send the representation to all the members. Also, the members should be notified of the representation by a notice. In case the company is not able to all the members the director may request for reading of this representation.
An application can be made to the tribunal if the organization or any aggrieved person decides against sending out the representation to the members or reading it out in the meeting, to request to nullify the process. The tribunal can also annul the process if it finds that the Director uses this right for unnecessary publicity for defaming purposes. This director is also given the right to issue an order demanding the director to cover the cost of the application borne by the company.
There are certain restrictions over the transfer of the shares of the Private lImited company the following procedure should be followed to transfer the shares:
Then the transferor will transfer the shares by the following process:
Form SH-4: This is the most important instrument of transfer through which the process is initiated. The transferor will have to submit the SH4 that is duly executed, dated, and stamped to the company. The SH4 contains the following information:
After the registered office of a company is declared by Filing the INC 22. In case there are any changes in the registered office of the company it must be intimated to the ROC. If the change in the registered office address is within the same area of city or town or village it must be notified within 15 days by filing the relevant forms.
If the change of the registered office address is outside the limits of the city or town or village then the registered office must approve a special resolution passed by the company. Suppose the registered office of the company is to be changed from one jurisdiction of a ROC to another jurisdiction, then the change should be approved by the Regional Director of the ROC. Visit iglifinancial.com to know more about the address change of a registered office.
Before starting with the procedures for increasing the authorized share capital it is necessary to verify the AOA to ensure that there is a provision in the Articles of Association referring to the increase of the authorized share capital. If there is no such provision then the company must first make changes to the AOA of the company.
Note: Most of the AOA’s have the provision for increasing the authorized share capital of the company.
After this whole procedure, a date should be fixed to conduct an Extra-ordinary General meeting to obtain the approval of the shareholders for increasing the authorized share capital and make changes to the MOA of the Company.
At last get the approval of the Board of Directors, the company secretary who is present at the meeting to present the notice of Extraordinary general meeting to the shareholders. Basing the approval, the notice of extraordinary general meeting should be presented to all the shareholders, directors, and auditors of the company.
Conduct the extraordinary general meeting and obtain the approval of the shareholders to increase the authorized share capital on the time, date, and place that is mentioned on the notice.
The approval of the shareholders to increase the authorized capital must be in the form of an ordinary resolution.
After the ordinary resolution is passed at the Extraordinary general meeting Form SH7 should be filed by the company within 30 days of passing the ordinary resolution. The prescribed government fee for the authorized capital must be paid and the documents mentioned below must be attached.
If the procedure mentioned in the Companies Act and the Companies Rules are followed to increase the authorized capital of the company then the registrar would approve the filing and increase the authorized share capital of the company. The new authorized share capital will be reflected on the MCA portal.
Once the authorized share capital is increased the paid-up share capital of the company can be increased by issuing the fresh equity shares.
To initiate the process of winding up of an LLP a resolution for winding up the LLP should be passed and filed with the registrar within 30 days of passing the resolution for the same. The date of passing the resolution of the winding up of the LLP the voluntary winding up shall be deemed to commence.
After the resolution for winding up of the LLP is filed with the registrar, the majority of Partners shall make a declaration that is verified by an affidavit to the effect that the LLP has no debts or that it will be in the position to pay the full debts within a period as mentioned in the declaration (This period should not exceed one year from the date of the commencement of winding up of the LLP).
Along with the affidavit that is signed by the majority of the Partners the following documents should be filed with the registrar within 15 days of passing the resolution for winding up an LLP:
The majority of the partners are needed to announce Form 2 stating that they have no sum unpaid or that they will clear the debts within a specified period but not exceedingly more than a year from the date of passing the resolution for the sake of winding up.
Now after passing the resolution of winding up and receiving the consent from the creditors for winding up within 14 days, the LLP is required to publish an advertisement regarding the resolution of the winding up in a newspaper that is circulated in the territory where the registered office is located or where the office of the LLP is registered.
After the approval from a majority of the partners is obtained through the resolution, a voluntary liquidator as the LLP liquidator is appointed with fixed remuneration. The liquidator will be appointed only after the approval of 2/3rd of the creditors in the value of the LLP.
The creditors also have a choice to nominate an LLP liquidator and in case of the instantaneous appointment by the creditors and the partners, the LLP liquidator that is appointed by the creditors will come to existence. If the liquidator is acting then the tribunal will be appointing an LLP liquidator.
After the affairs of the LLP are fully wound up, the LLP liquidator will need to prepare a report that states how the winding-up of the LLP has been conducted and the property of the LLP has been disposed of.
In case two-thirds of the number of the Partners and creditors in value are satisfied with the report of winding up that is prepared by the LLP liquidator, then a resolution for winding up the accounts and the explanation for the dissolution must be passed by the partners.
The LLP liquidator is then required to send this LLP winding up report along with the resolution to the Registrar and file an application with the tribunal.
A report will be made by the LLP liquidator as soon as the affairs of the LLP are wound up. Discharging the liabilities of the LLPS mean that the liabilities have been discharged, the assets have been liquidated, a report will be made by the LLP liquidator in Form 9. This form states how the company has been wound up and also includes the final accounts closing with the detailed explanation and the property which has been disposed of. Once this approval of the partners, the creditors are sought for dissolution.
In the end, it can be concluded by saying that closing an LLP is rather a two-way process where one wants to wind up the LLP and decides to do it as well as other circumstances make one do it.
The Limited Liability Partnership Rules, 2009 was recently amended by introducing the Limited Liability Partnership Rules,2017 with effect from 20th May 2017. Under this amendment form, LLP 24 has been introduced by the MCA and now it is possible to windup the LLP easily by just making an application to the Registrar for striking off the name of the LLP.
Before the introduction of this Limited Liability Partnership Rules,2017 the procedure for winding up an LLP used to be very long and cumbersome. But, the introduction of LLP form 24 under the new amendment has made the whole process very easy and simple.
Once the process of Winding up begins a company is not allowed to pursue its business except in case if the LLP has to complete the liquidation and the distribution of the assets. By the end of the process, the company will be dissolved and the LLP will effectively cease to exist.
An individual or a living person can be appointed as a Director in a company, an entity or a body corporate cannot be appointed as the director of a company.
A company can have a maximum of fifteen directors and if the company wants to increase the number of directors it can be further done by passing a special resolution.
Yes, there are certain protocols which are as follows: The proposed individual has to be a major He or she has to qualify under the law mentioned under the Companies Act,2013 The members of the board should agree to the appointment of the new director
For appointing a new director e-Form DIR 22 is to be filed.
No there is no requirement as such that the director needs to be amongst the shareholders. A person who has no shares can also be appointed as a Director in the Company.
No there is no such requirement the additional change can be done online, you can talk to our experts for the same.
A company can remove the authority to remove a Director by passing an ordinary resolution that is given to the Director. A board meeting will be conducted by giving notice 7 days before all the Directors.
The ordinary resolution that is passed is not to be filed with the registered.
Yes, a Director of a company can be removed without his consent under certain circumstances.
No, a Director who is removed once cannot be appointed as a director again.
Transfer of shares is referred voluntary handing over the rights and possibly the duties of a company member.
People involved in share transfer are: A subscriber to the memorandum The legal representative in case of the deceased Transferor Transferee Company ( Whether listed/ unlisted)
The registered office is the principal place of business, the registered office will be used for all the official communication.
Yes, the registered office of a company can be shifted from one place to another in the same state or from one state to another. It is a legal procedure that can be completed online.
It usually takes 2-4 working days to process the application form.
Form INC 22 and MGT 14 need to be filed with the ROC for changing the address of the company.
Private Limited Companies are required to have a minimum authorized share capital of Rs.1 lakh and Rs.5 lakh for public limited companies
Yes, it is necessary to increase the authorized share capital of the company.
Form MGT 14 and SH 7 are required to be filed with the Registrar within 30 days from the date of passing the resolution for the increase in authorized share capital.
Possible reasons for liquidation are:
LLP Form 24 has been introduced by the MCA to wind up the LLP easily by just making an application to the Registrar for striking off the name of the LLP.
Winding up is the process of dissolving a company when a company ceases to do the business as usual. Here the company wants to sell off the stock, pay the creditors and distribute the remaining assets to the partners and the shareholders.
The whole process may take 3 to 6 months to complete, once the application is approved the details will be placed on the website of the MCA for the information of the general public for one month.
LLP needs to be closed on the following conditions:
If the LLP is not operative for the date of incorporation or inactive for one year. LLP does not have any assets or liabilities as of the date of the application.
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