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Appointment of director

CA Nayan Gupta (Finance Manager Overcart.com) (1695 Points)

30 August 2012

Hello Guys...

I obtained the DIN of one person two days back. Now I want to appoint him as director today in an existing company wef 30th July 2012(i.e. one month back).. So is it possible and more importantly legal?

Thanks in advance...

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15 Replies

CA Gnanika (CA ) (485 Points)
Replied 30 August 2012

Well legally it is not valid, because to be a director it is mandatory to obtain DIN. So the date of appointment will be with effect from date of obtaining DIN.

Anyway check out for other expert opinions too..

Sumit Jaiswal (Company Secretary) (818 Points)
Replied 30 August 2012

I dont think this would be legal.

Section 253 of the Companies Act says: No company shall appoint or re-appoint any individual as director of the company unless he has been allotted a Director Identification Number.

Every individual, intending to be appointed as director of a company shall make an application for allotment of Director Identification Number (DIN). Therefore, any proposed director of a company must ensure that he/she is having DIN and if not having DIN, it should be first obtained.

1 Like

CA Gnanika (CA ) (485 Points)
Replied 30 August 2012

Agreed with Mr Sumit Jaiswal, Perfect answer

deepak (Job) (69 Points)
Replied 30 August 2012

Yes , it is legal , in my openion , DIN Can be obtained within 30 days from the date of appointment,

Thanks

Kirti Arora (Company secretary CA final Student) (75 Points)
Replied 31 August 2012

Dear Nayan Gupta

It is totally legal You can go for the appointment of director. You have obtained din within 30 days as it is statuory. One another thing is that you can appoint the director before 30th July by paying additional fees with form 32.

Companies Act says that No director can be appoint without first obtaining din but it also allow to appoint director from previous period. so there is no questioning regarding illegal. Legal wording

"266A. Application for allotment of Director Identification Number.

Every-

(a) individual, intending to be appointed as director of a company; or

(b) director of a company appointed before the commencement of the Companies (Amendment) Act, 2006, shall make

an application for allotment of Director Identification Number to the Central Government in such form, and manner

(including electronic form) alongwith such fee, as may be prescribed:

Provided that every director, appointed before the commencement of the Companies (Amendment) Act, 2006, shall

make, within sixty days of the commencement of the said Act, such application to the Central Government:

Provided further that every applicant, who has made an application under this section for allotment of Director

Identification Number, may be appointed as a director in a company, or, hold office as director in a company till such

time such applicant has been allotted Director Identification Number.

"NO WHERE MENTION THE PERIOD FOR OBTAINING DIN TO GET APPOINETED AS DIRECTOR"

(Guest)

Late of appointment of director can not be earlier than his obtaining DIN.

It is not legal as per proviso to section 253.

As per proviso to section 253 of the Companies Act, 1956, inserted by the Companies (Amendment) Act, 2006, w.e.f. 1-11-2006, no company shall appoint or re-appoint any individual as director of the company unless he has been allotted a Director Identification Number under section 266B.

With Regards

Neha

CS Ankur Srivastava (Company Secretary & Compliance Officer) (17848 Points)
Replied 01 September 2012

Originally posted by : Sumit Jaiswal
	I dont think this would be legal. Section 253 of the Companies Act says: No company shall appoint or re-appoint any individual as director of the company unless he has been allotted a Director Identification Number. Every individual, intending to be appointed as director of a company shall make an application for allotment of Director Identification Number (DIN). Therefore, any proposed director of a company must ensure that he/she is having DIN and if not having DIN, it should be first obtained.

As such practically it is possible for which MCA should take stept to relate the date of DIN to the date of Appointment to stop this.

In my opinion it is illegal.

Sumit Jaiswal (Company Secretary) (818 Points)
Replied 01 September 2012

Agree with Ankurji completely. This is not legal but this may be practically possible, if done this might go unnoticed. MCA should take corrective steps.

(Guest)

In my opinion, ROC may raise query later on when it comes to notice.

So, as per good corporate practice it is better to avoid this.

1 Like

Kirti Arora (Company secretary CA final Student) (75 Points)
Replied 01 September 2012

Neha, Sumit and Ankur ji you are totally correct in regard to section 253 which says that

"253. ONLY INDIVIDUALS TO BE DIRECTORS.

No body corporate, association or firm shall be appointed director of a company, and only an individual shall be so

appointed.

[Provided that no company shall appoint or re-appoint any individual as director of the company unless he has been

allotted a Director Identification Number under section 266B.]"

Now read undermentiond section 266A