• Company Law question - Non Board Director

Dear Sir/Madam, 
Can we give a designation of a Director to our employee who is not on the board of Directors.

 If yes,then what will be his rights & responsibilities. If not but we will still give him/her the designation of Director what would be the effects.
Asked 5 years ago in Corporate Tax

Hi,

 

Yes, you can give a designation of a Director to your employee.

 

If the employee designated as "Director" even though he is not a member of the Board than it may fall under "Deemed to be Director of the Company" under Explanation (1) of Section 303(1)if Board acts in accordance with his instructions or he holds himself as Director by signing the Balance sheet as 'Director" For signing part, he can continue to Sign IN ADDITION TO BOARD OF DIRECTOR AND CS thus complining with Sec 215. But do not use designation as Director.


Payal Chhajed
CA, Mumbai
5188 Answers
288 Consultations

5.0 on 5.0

Yes you can appoint an employee as a director of your company and he can be included in the board of directors.

Naman Maloo
CA, Jaipur
4265 Answers
96 Consultations

5.0 on 5.0

As the executive director is also treated as an employee of the company because he manages all the affairs of the company. An employee can become director of the company and participate in the board meetings.

Vivek Kumar Arora
CA, Delhi
4825 Answers
1031 Consultations

5.0 on 5.0

DIN would be applied for each director. It is mandatory to apply for DIN without which person can not be appointed as director. 

Vivek Kumar Arora
CA, Delhi
4825 Answers
1031 Consultations

5.0 on 5.0

I dont think that is possible no director can be appointed without DIN and he will participate in board meetings.

Naman Maloo
CA, Jaipur
4265 Answers
96 Consultations

5.0 on 5.0

Hi,

 

As per section 152(3) of the Companies Act, 2013, No person shall be appointed as director of the Company unless he has allotted DIN under section 154 of the Act. Hence Din should be obtained before appointment as director in the company  

However, it can be done but this against the provisions of law. The problem will arise in case of scrutiny


Payal Chhajed
CA, Mumbai
5188 Answers
288 Consultations

5.0 on 5.0

Hi,

 

Yes, you can give an employee designation of director such as finance director, tax director, business unit director etc. Without having him on the board of directors.

 

The roles and responsibilities will depend upon his work profile. It's upon company to decide.

Lakshita Bhandari
CA, Mumbai
5687 Answers
909 Consultations

5.0 on 5.0

Hi

 

Yes ,you can appoint employee as director,but DIN is compulsory for appointment of director.

 

 

Swati Agrawal
CA, Mumbai
1146 Answers
7 Consultations

5.0 on 5.0

Hi,

 

Although a person should have a DIN no. before his appointment as a Director.

but practically it is quite possible DIN No. can be obtained after his appointment as a Director also and Form 32 can be filed later on after obtaining DIN no.


 

 

Karishma Chhajer
CA, Jodhpur
2450 Answers
29 Consultations

5.0 on 5.0

Ask a Chartered Accountant

Get tax answers from top-rated CAs in 1 hour. It's quick, easy, and anonymous!
  Ask a CA