In this write-up, I am sharing with you all my understanding about the appointment of Foreign Director on a Board. As a Budding Professional we generally think that it could be more cautions to appoint a Foreign Director in a Company but there is no such additional requirement under FEMA. A foreigner or a non-resident Indian can become an executive or a non-executive/independent director of Indian companies whether public or private.
The only Basic requirement is to Get a valid DSC (Digital Signature Certificate) and DIN (Director Identification Number), a valid Indian employment visa would be required for appointment as a managing director or a whole-time director.
Procedure to be followed for Appointment: -
1. TO GET DSC: A Foreign National or NRI appointing as Director in an Indian company must obtain Digital Signature Certificate firstly.
Proof of Identity:
1. Copy of Passport issued by the country of residence.
Proof of Address: - Any one of the Following (If the address is in a language other than English then translation in the English language required.)
1. latest Mobile Bill
2. Bank statement
3. Electricity Bill mentioning the address of residence.
2. TO GET DIN: Director Identification Number is to be obtained and following documents required for the same to File e-form DIR-3.
Passport Size Photograph
Proof of Identity: - Copy of Passport, Passport issued by the country of residence.
Proof of Address: -Any one of the Following (If address is in language other than English then translation in English language required.)
Latest Mobile Bill or
Bank statement or
Electricity Bill mentioning the address of residence
Copy of citizenship (if any) card
Authority Letter from the Existing Director of the Company in which the appointment if proposed to be done.
Once we are done with basic requirements Conduct Board Meeting by service Proper Notice and Pass the resolution for Appointment of Director with requisite majority.
Form DIR-12 is to be filed with the Ministry of Corporate Affairs, the following documents required for the same:
DIR-2: Consent to act as Director of the Company.
DIR-8 (Intimation by Director about his interest in other entities and Disqualification under section 164 of the Companies Act, 2013).
Letter of Appointment from the company.
The resolution passed by the Company for his/her appointment. (Board Meeting/Shareholders Meetings)
Please note the below: -
All documents mentioned above should be notarized before the Notary (Public) of the country of origin and be duly Apostilled.
All the documents mentioned for the Directors will be required in two sets, duly notarized and apostilled as mentioned.
All documents to be in English, if not then the translation will be required which also will be duly notarized and apostilled.
Just like Indian nation Director and Foreign director shall be appointed as additional director in Board Meeting.
Procedure for Resignation of a Foreign Director
As Per Section 168 of Companies act 2013, a director may resign from his office by issuing a notice in writing to the company.
On condition that a director may also forward a copy of his resignation with detailed reasons for the resignation to the Registrar within 30 days of resignation in a prescribed manner
A director can resign after giving written notice to the company and on receipt of the notice of resignation next step would be to inform the Registrar of Companies after that company will propose all the facts and reports in the following General Meeting.
According to Rule 15, the company shall inform the Registrar in Form DIR- 12 within 30 days from the date of receipt of notice of resignation from a director. Company must file DIR-12 within 30 days of receipt of notice of resignation by the director.
ATTACHMENTS FOR DIR-12 OF RESIGNATION OF DIRECTOR:
Copy of Board Resolution
Acknowledgement of Acceptance of Resignation Letter.
INTIMATION OF RESIGNATION TO ROC BY DIRECTOR HIMSELF.
According to Rule 16, where a director resigns from his office, within 30 days from the date of resignation, he shall forward to the Registrar a copy of his resignation with reasons for the resignation in Form DIR-11. This should accompany with the fee as recommended in the Companies Rules, 2014 (Registration Offices and Fees).
In case a company has already filed Form DIR-12 with the Registrar of Companies, a foreign director of such company resigning from his office may authorize in writing a practising professional (CA, CS, CWA) or any other resident director of the company to sign Form DIR-11. Such e-Form shall be filed on his behalf intimating the reasons for the resignation (however, as on date this provision is not mandatory).
As Section 168(2), Companies Act, 2013, the resignation of a director shall take effect from the date on which the “Notice is received” by the company. Under the provisions of section 168, Companies act 2013, no right has been offered to any managerial person to reject the resignation given by Directors.
WHAT IF COMPANY NEITHER ACCEPT THE RESIGNATION NOR INTIMATE TO ROC?
If a Director who has submitted his resignation (for example on 31st July 2020) from the post of director to the board of directors and the board of directors neither approved the resignation nor it filed the form necessary to be filled by the company to the Registrar of companies, then according to sec 168(2), Companies Act, 2013 the director who has resigned would discontinue being a director with effect from 31st July 2020.
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