First Directors

If directors are not duly appointed then subject to any regulations in the articles of the company, subscribers of the memorandum who are individuals shall be deemed to be the directors of the company. Where the subscribers are directors they hold office until first directors are actually appointed. First directors can also be appointed by naming them in the articles of association. The memorandum and articles when filed for registration with the Registrar usually mention the first directors of the company. They hold office until directors are duly appointed in the general meeting.

Appointment in General meeting:

Subject to any regulations in the articles of the company, directors shall be appointed by the company in the general meeting. At the general meeting either the retiring director or a person other than retiring director can be appointed as a director of the company. The directors of the company shall be appointed individually by election, by the members at a general meeting. At general meeting of a public company or a private company which is subsidiary of a public company a motion shall not be made for the appointment of two or more persons as directors of the company by a single resolution, unless a resolution that it shall be so made has first been agreed by the meeting without any vote being given against it. A resolution moved in contravention shall be void, whether or not objection was taken at the time of it being so moved. That articles may, however be so expressed as to delegate the power of appointing new directors to the Board to the exclusion of the general meetings.

However, where the power of appointment vested in the shareholders, is usurped by the directors, the appointment of directors shall be void. Where there are no validly appointed directors functioning the shareholders have the right to appoint directors at the annual general meeting.

Rights of persons to stand for directorship:

A person who is not a retiring director shall be eligible for appointment to the officer of a director at any general meeting if he or some member intending to propose him or not less than 14 days before the meeting, leaves at the office of the company a notice in writing under his hand, signifying his candidature for the office of the director or the intention of such member to propose him as a candidate for that office as the case may be, along with a deposit of five hundred rupees which shall be refunded to such person or as the case may be to such a member if the person succeeds in getting elected as director. In case such a person is not elected as director, he will not be entitled to the refund of Rs 500 and the amount deposited shall stand forfeited to the company.

The company shall inform its members of the candidature of person for the office of a director or the intention of a member to propose such person as a candidate for that office by serving individual notices on the members not less than 7 days before the date of the meeting. However, it shall not be necessary for the company to serve individual notices upon the members if the company advertises such candidature or intention not less than 7 days before the meeting in at least two newspapers circulating in the place where registered office of the company is located of which one is published in the English language and the other in the regional language.

The above provisions shall not apply to a private company, unless it is a subsidiary of a public company.

Source: Business Law