Director addition to private limited company

MCA 185 views 2 replies

Tony K

Shareholder

51 Points Joined April 2019

Background:

Private Limited Company had only two directors. One of the directors expired. The second Director is not cooperating to add more directors due to personal interests.

99.8% shares of the company are held by 3 majority shareholders. Remaining 0.2% shares are held with 8 other shareholders.

The three majority shareholders want to move forward and add 3 more directors to the company very quickly.

Questions:

1) Given both directors are not going to be available, what is the fastest process we need to follow to reconstitute the board of directors ?

2) Can shareholders exercise any special powers to add Directors quickly ?

3) Can a Private Limited Company operate with a single director after 2nd director death? For how long and one does it go out of compliance with MCA rules?

4) Is there any sort of online paper filing required with MCA to complete the process by the Director ? In our case since the only Director is not cooperating, what are our options if any papers need to be filed to complete our work for adding directors?

Appreciate any details you can provide to guide me.

Regards

Replies (2)

SHRIRAM PRASAD

79 Points Joined July 2017

As Investor following are the rights

The members/shareholders of a company can call for an extraordinary general meeting. However, only certain members with a significant stake in the company are allowed to call for an EGM. They are listed in the Companies Act,2013 as follows.

In the case of a company having a share capital, members holding not less than one-tenth of such paid-up capital of the company that carry voting rights in regard to that matter as on the date of depositing the requisition;
In the case of a company not having a share capital, members holding not less than one-tenth of the total voting power in regard to that matter as at the date of deposit of the requisition.
EGM called by Board. Upon the receival of a valid requisition, the Board has a period of 21 days to call for an EGM. The EGM must be then held with 45 days from the day of the EGM being called.
EGM called by the requisitionists – In case the Board fails to call for an EGM, it can be called for by the requisitionists themselves during a period of 3 months from the day the requisition was deposited. If the EGM is held within this specified period of 3 months, it can be adjourned to any day in the future after the 3 months.

So you can call EGM and appoint Directors. This solves most issue. Having only one Director is not possible and valid to pass any resolution in BM or GM. The company will be disqualfied. You also cannot convert to one person company unless current company has 2 Directors and share holders approval required.