Changes in a Private Limited Company

Adding a director

Companies add directors to expand the board, replace a director who is leaving, bring in specific expertise or reflect a change in ownership. The appointment must follow the Articles of Association and be reported to the ROC within 30 days.

1. Check the ArticlesConfirm the AoA allow the appointment and the board limit; amend them if needed.
2. Obtain consentThe new director gives consent in Form DIR-2 and a non-disqualification declaration in DIR-8.
3. DSC and DINWe obtain a DSC and, if the person has no DIN, apply for one through Form DIR-3.
4. Pass resolutionsA board resolution appoints an additional director; regularisation as a director happens at the next general meeting.
5. File DIR-12Filed with the ROC within 30 days, with consent and resolution attached.

Documents

• PAN and Aadhaar of the new director
• Address proof
• Passport-size photo
• DSC
• DIR-2 consent and DIR-8 declaration
• Board resolution

Removing a director

A director may leave by resignation, vacate office automatically (for example by missing all board meetings for 12 months, or on disqualification under Section 164), or be removed by shareholders by ordinary resolution under Section 169.

• ResignationDirector sends a resignation letter and may file DIR-11; the company files DIR-12 within 30 days.
• Absence from meetingsOffice is vacated under Section 167; the company files DIR-12.
• Removal by shareholdersSpecial notice, board meeting, general meeting with the director's right to be heard, ordinary resolution, then DIR-12.

DIR-12 filed late attracts additional fees that rise with the delay — so we file promptly.

Increasing authorised share capital

Authorised capital is the maximum share capital a company can issue. Before bringing in new investors or issuing more shares beyond this limit, it must be increased.

1. Check the ArticlesConfirm the AoA permit the increase; amend them by special resolution if not.
2. Board meetingApprove the proposal and call an extraordinary general meeting (EGM).
3. EGMShareholders pass an ordinary resolution to increase capital and alter the capital clause of the MoA.
4. File SH-7Within 30 days, with the resolution and altered MoA. Stamp duty and ROC fees are paid on the increase. (MGT-14 is also needed if the AoA were altered by special resolution.)

Common reasons: raising investment, funding expansion, issuing bonus or rights shares, converting loans to equity, or mergers.

Changing the registered office address

The registered office is where the ROC sends all official communication and where statutory records are kept. Every change must be reported.

Documents for a new address

• Utility bill not older than 2 months
• Rent / lease agreement or ownership proof
• NOC from the owner
• Board / special resolution

Closing or winding up a company

If the business is no longer active, it is better to close the company formally than to let penalties build up. There are two main routes:

• Strike off (Form STK-2)For companies that have not done business for two years or never started. Quickest and most economical route, provided there are no liabilities.
• Voluntary liquidationFor solvent companies with assets and liabilities, under Section 59 of the Insolvency and Bankruptcy Code, through an insolvency professional.

Documents for strike off

• Indemnity bond from directors (notarised)
• Affidavit from directors
• Statement of accounts certified by a CA, not older than 30 days
• Special resolution of shareholders
• Proof that all pending ROC returns are filed
• Bank account closure statement

In a liquidation, assets are applied in the order set by law — insolvency costs and secured creditors first, then employee dues, government dues, unsecured creditors and finally shareholders.

Frequently asked questions