Q. What are the various modes of appointment of directors? Explain.

Section 152 of Indian Companies Act 2013 dealt with the

appointment of directors of a Company. Sec. 152(1) Where no provision is
made in the articles of a company for the appointment of directors. of the
first director, the subscribers to the memorandum who are individuals
shall be deemed to be the first directors of the company until the directors
are duly appointed and in case of a One Person Company an individual
being member shall be deemed to be its first director until the director or
directors are duly appointed by the member in accordance with the
provisions of this section. Every director shall be appointed by the
company in general meeting. A person appointed as a director shall not act
as a director unless he gives his consent to hold the office as director and
such consent has been filed with the Registrar within thirty days of his
appointment in such manner as may be prescribed.
No person shall be appointed as a director of a company unless he
has been allotted the Director Identification Number under section 154.
Every person proposed to be appointed as a director by the company in
general meeting or otherwise, shall furnish his Director Identification
Number and a declaration that he is not disqualified to become a director
under this Act.
A public company or a private company which is a subsidiary of a
public company cannot increase the number of directors beyond the
permissible maximum under its articles without the approval of the central
government. However, no approval of the central government is required if
such permissible maximum is twelve or less than twelve, and the increase
in the number of its directors does not exceed twelve.
Director may be appointed in the following ways:

 By the articles as regards first directors.

By the company in general meeting.
By the directors,
By third parties
By the principle of proportional representation
By the central government
First directors - The first directors are usually named in the
articles. The articles may also provide that both the number and the
names of the first directors shall be determined in writing by the
subscribers to the memorandum or a majority of them. Where the articles
are silent regarding the appointment of directors, the subscribers of the
memorandum who are individuals shall be deemed to be the first directors
of the company. They shall hold office until the directors are appointed at
the first annual general meeting.
Appointment by company - Appointment of subsequent directors is
made at every annual general meeting of the company. Section 255
provides that not less than two-thirds of the total number of directors of a
public company must be appointed by the company in general meeting.
These directors must be subject to retirement by rotation. The remaining
directors of such a company and the directors generally of a purely private
company must also be appointed by the company in general meeting. In
other words, not more than one-third of the total number of directors can
act as non-retiring directors i.e not subject to retirement by rotation.
Appointment by Directors - The directors are empowered to appoint
Additional directors.
Alternate directors.

 Directors filling casual vacancy.

The board of directors may appoint additional directors from time to
time. The number of directors and additional directors must not exceed the
maximum strength fixed for the board by the articles. The board of
directors may appoint an alternate director if authorized by the articles or
by a resolution of the company in general meeting.
An alternate director acts in the place of a director who is absent for
more than three months from the state in which board meetings are
held. The director so appoint will hold office till the end of the term of the
director in whose place he is appointed. These provisions are applicable
only to a public company and a private company which is a subsidiary of
the public company.
Appointment by third parties - The articles may gives right to
debenture-holders, financial corporations or banking companies who have
advanced loans to the company to nominate director on the board of the
company. The number of directors so nominated should not exceed onethird of the total strength of the board. They are not liable to retire by
rotation.
Appointment by proportional representation - The articles of a
company may provide that the appointment of not less than2/3 of the total
number of director of a public company shall be according to the principle
of proportional representation, either by the single transferable vote or by a
system of cumulative voting or otherwise. Such appointments shall be
made once in three years and interim casual vacancies may be filled up
according to the Act.
Appointment by the central government - According to section
408 of the companies act, the central government has the power to appoint

directors for the purpose of prevention of oppression and mismanagement.

It provides that the central government may appoint such number of
directors on the board of the company as it may think fit to effectively
safeguard the interest of the company, its shareholders, or public interest.
Such an appointment shall be for a period not exceeding three years, and
shall be made on the application of not less than 100 member or members
holding not less than 1/10th of the voting power of the company. Such
directors will not be required to hold any qualification shares, not they
shall be liable to retire by rotation.