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Procedure for appointment of director by shareholders in General
Meeting

1. In case of a Private Company which is not subsidiary of a Public Company, the provisions
of this section are not applicable and the appointment will be governed as per the Articles
of Association of the Company. (Procedure for alteration of Articles of Association)
2.
Ensure that the persons to be appointed must have [Director Identification Number]
(Section 266A) before being appointed as director.

3. Notice must be given to the Company regarding proposal for appointment of a person as a
director not less than 14 days before the General Meeting.

4. Ensure that the aforesaid notice is not given by a person who is a retiring director. The
notice must be given by a member of the company with a deposit of Rs. 500/- per
candidate which will be refunded in case the candidate is elected. Alternatively, the
person proposed to be appointed as director may himself give notice of his candidature as
aforesaid.

5. There is no prescribed form for this [notice].

6. Obtain a [written consent] [Section 264(1)] from the person who is to be appointed as
Director unless the individual himself notified his candidature.

7. Inform all the members about the aforesaid candidature not later than 7 days before the
meeting either by individual notices or by advertisement of this fact in at least two
newspapers circulating in the place where the registered office of the company is situated,
of which one must be in English and the other in regional language of that place, both the
newspapers must have vide circulation. (Section 257 Provisos)

8. In case of listed companies forward three copies of this notice to the stock exchange with
which the shares of your company are listed. [Clause 31(c) of the Standard Listing
Agreement]

9. Hold and convene a General Meeting and pass an [Ordinary resolution], [Section
189(1)] if the Articles of Association of your company require passing of Special resolution
for such appointment, then pass a special resolution with three-forth majority [Section
189(2)]. In case the of Special resolution see [Section 192]

10. In case of listed companies send 3 copies of the notice and a copy of the proceeding of
the General meeting to the Stock Exchange with which the shares of your company are
listed. [Clause 31(c) & (d) of the Standard Listing Agreement]

11. Such Director need to make a [intimation] with in twenty days to the other companies in
which he is already a director, Managing Director, manager, Secretary.(Section 305).

12. File [e-form no 32] with the concerned ROC within 30 days from the date of Appointment.

13. Pay the requisite fee through Credit Card / by cash / by cheque in favour of “MCA
Collection Account ICICI Bank” at the prescribed rates (Fee Calculator)

14. Make necessary entries in the Register of Directors and in the Register of Director’s
Shareholding [section 303(1) & 307].

15. If default is made in complying with the aforesaid requirements, the company and every
 officer of the Company who is in default will be punishable with fine upto Rs. 500/- for
every day during which the default continues in case of contravention of[Section 303
(1)] and in case of contravention of [Section 307(1)] with fine upto Rs. 50,000/- and also
with a further fine of upto Rs. 200/- for every day during which the default
continues [Section 303(3) read with Section 307(8)]

16. Refund the deposit of Rs. 500/- mentioned in point 4 to the person who has given the
notice of candidature of a director only when he is appointed in the General Meeting and
not otherwise.

17. Notify the Stock Exchange with which shares of the Company are listed about the change
in the company directors [Clause 30(a) of the Standard Listing Agreement]

NOTE
Section 257 provides for the right of persons other than the retiring directors to stand for directorship, and
provides for the machinery for the election of such persons. It enables a person to stand for directorship
at any general meeting and not necessarily only at an annual general meeting.
Any director retiring by rotation at an annual general meeting may be re-appointed at that meeting. This
simply requires a recommendation by the Board of directors to the members of the company, which can
be given by including in the notice of the annual general meeting under 'Ordinary Business' an item
proposing the re-appointment of such director. However, the company at the annual general meeting can
appoint some other person instead of the retiring director [section 256(3)]. In this case, the provisions of
section 257 must be complied with.
Likewise, if a person, who is not a retiring director or who holds the office of director but was not
appointed at an annual general meeting, is to be appointed as a director at an annual general meeting,
the provisions of section 257 must be complied with.
Thus, the provisions of section 257 must be complied with when a person who is not a retiring director, is
to be appointed as a director at any general meeting. The expression "retiring director" means a director
retiring by rotation at an annual general meeting pursuant to the provisions of section 256.
Section 257 is not applicable to a private company which is not a subsidiary of a public company.
An essential pre-requisite for a retiring director to be re-appointed as director (whether to fill up the place
of the retiring director or otherwise) as laid down in section 257(1), is that the company should have
received a notice proposing a person as a candidate for directorship, to be appointed at the annual general
meeting. This notice should be given to the company either by the person desiring to get appointed as a
director or by any member of the company intending to propose some other person as director. In the
former case, the person giving the notice need not be a shareholder of the company. In either case, the
notice must reach the company not less than fourteen days before the date of the concerned annual
general meeting. The nomination need not be seconded.
The following requisites of section 257 must be complied with:

(1) The company must receive a notice proposing a person as a candidate for directorship, to be
appointed as a director at a general meeting [section 257(1)].
(2) The notice of candidature can be given either by the candidate himself even if he is not a member
of the company or by any member of the company.
(3) The notice must be in writing and signed by the candidate or the member giving it. If the notice is
given by a member, it is advisable to mention the number of shares held and the folio.
(4) The notice must be given not less than 14 days before the meeting, i.e. 14 days or more. The
notice must reach the company at least on the 14th day before the date of the meeting.
(5) The notice must be left at the office of the company. The notice must be given in the manner
stipulated in section 51 of the Companies Act.
(6) The notice must accompany an amount of Rs. 500, which may be paid in cash or by cheque or
demand draft.
There is no requirement as regards a specific time or hour at or before which the notice must be
deposited. Therefore, the notice may be deposited at any time during the relevant day. Rejection of notice
on the ground that it was deposited at 3.31 p.m. being "the last moment" on the 14th day before the day
of the meeting was held to be wrong
If you are a listed company, note-
That the Board of Directors of the Company shall have an optimum combination of executive and non-
executive directors, independent and non-independent directors

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