Appointment of Additional Director, Alternate director and Nominee Director
Section 161 of the Companies Act,2013 deals with the Appointment of Additional Director, Alternate Director and Nominee Director
Additional Director:
The articles of a company may confer on its Board of Directors the power to appoint any person, other than a person who fails to get appointed as a director in a general meeting, as an additional director at any time.
An additional director shall hold office up to the date of the next AGM or the last date on which the AGM should have been held, whichever is earlier.
Alternate Director:
The Board of Directors of a company may, if so authorised by its articles or by a resolution passed by the company in general meeting, appoint a person, not being a person holding any alternate directorship for any other director in the company, to act as an alternate director for a director during his absence for a period of not less than 3 months from.
A person shall not be appointed as an alternate director for an independent director unless he is qualified to be appointed as an independent director under the provisions of this Act.
An alternate director shall not hold office for a period longer than that permissible to the director in whose place he has been appointed and shall vacate the office if and when the director in whose place he has been appointed returns to India.
If the term of office of the original director is determined before he so returns to India, any provision for the automatic re-appointment of retiring directors in default of another appointment shall apply to the original, and not to the alternate director.
Nominee Director:
Subject to the articles of a company, the Board may appoint any person as a director nominated by any institution in pursuance of the provisions of any law for the time being in force or of any agreement or by the Central Government or the State Government by virtue of its shareholding in a Government company.
Casual Vacancy:
In the case of a public company, if the office of any director appointed by the company in general meeting is vacated before his term of office expires in the normal course, the resulting casual vacancy may, in default of and subject to any regulations in the articles
of the company, be filled by the Board of Directors at a meeting of the Board.
Any person so appointed shall hold office only up to the date up to which the director in whose place he is appointed would have held office if it had not been vacated.
Companies Act,2013 Vs Companies Act,1956
S.No CA,2013 CA,1956
Alternate Director:
1 Section 161 of the CA,2013 provides that BoDs of a company may appoint a person to act as an alternate director for a director during his absence for a period of not less than 3 months from India. Section 313 of the CA,1956 empowered the BoDs to appoint a person, to act as an alternate director for a director during his absence for a period of not less than 3 months from the state in which meetings of the board are ordinarily held.
2 It provides for vacation of offices when the original director returns to India. It provides for vacation of office by alternate director if and when the original director returned to the state in which 3board meetings are ordinarily held
3 It requires the person appointed as Alternate director should not be a person holding any alternate directorship for any other director in the company. There was no such requirement.
Nominee Director
4 It provides that Subject to the articles of a company, the Board may appoint any person as a director nominated by any institution in pursuance of the rovisions of any law for the time being in force or of any agreement or by the Central Government or the State Government by virtue of its shareholding in a Government company. There was no such provision
Additional Director
5 It provides that the BoDs shall not appoint a person who fails to get appointed as a director in a general meeting as an Additional director. There was no such provision.
Extract of Section 161 of the Companies Act, 2013
161. Appointment of additional director, alternate director and nominee director
(1) The articles of a company may confer on its Board of Directors the power to appoint any person, other than a person who fails to get appointed as a director in a general meeting, as an additional director at any time who shall hold office up to the date of the next annual general meeting or the last date on which the annual general meeting should have been held, whichever is earlier.
(2) The Board of Directors of a company may, if so authorised by its articles or by a resolution passed by the company in general meeting, appoint a person, not being a person holding any alternate directorship for any other director in the company, to act as an alternate director for a director during his absence for a period of not less than three months from India:
Provided that no person shall be appointed as an alternate director for an independent director unless he is qualified to be appointed as an independent director under the provisions of this Act:
Provided further that an alternate director shall not hold office for a period longer than that permissible to the director in whose place he has been appointed and shall vacate the office if and when the director in whose place he has been appointed returns to India:
Provided also that if the term of office of the original director is determined before he so returns to India, any provision for the automatic re-appointment of retiring directors in default of another appointment shall apply to the original, and not to the alternate director.
(3) Subject to the articles of a company, the Board may appoint any person as a director nominated by any institution in pursuance of the provisions of any law for the time being in force or of any agreement or by the Central Government or the State Government by virtue of its shareholding in a Government company.
(4) In the case of a public company, if the office of any director appointed by the company in general meeting is vacated before his term of office expires in the normal course, the resulting casual vacancy may, in default of and subject to any regulations in the articles of the company, be filled by the Board of Directors at a meeting of the Board:
Provided that any person so appointed shall hold office only up to the date up to which the director in whose place he is appointed would have held office if it had not been vacated