How to Become a Director of a Company in India
A director is an individual appointed to manage the affairs of a company on behalf of its shareholders. Before being appointed, every director must obtain a Director Identification Number (DIN) and a Digital Signature Certificate (DSC). The appointment itself must be formalised through a Board resolution and filed with the MCA within 30 days.
Types of Directors
| Type | Description |
|---|---|
| Executive Director | Employed full-time by the company; involved in day-to-day management; draws a salary as an employee |
| Non-Executive Director | Part-time; provides oversight and strategic guidance; not involved in daily management; may receive sitting fees |
| Independent Director | Mandatory for listed companies and certain public companies; must have no material relationship with the company, its promoters, or its management |
| Managing Director | An executive director to whom the Board has delegated substantial management powers under the Articles and a Board resolution |
| Additional Director | Appointed by the Board between two AGMs under authority granted by the AOA; must be confirmed (or vacates office) at the next AGM |
| Nominee Director | Appointed by an investor, lender, or shareholder under a shareholder agreement or loan agreement giving them the right to board representation |
Every company must have a minimum of 2 directors (7 for a public company), and at least one director must have stayed in India for a total of at least 182 days in the preceding calendar year - i.e., at least one director must be an Indian resident.
Director Identification Number (DIN)
Every individual who intends to be appointed as a director must first obtain a Director Identification Number. The DIN is an 8-digit unique number issued by the MCA. It is linked to the individual’s PAN and remains valid for life - it does not expire and does not need to be renewed.
DIN is applied for via Form DIR-3 on the MCA21 portal. The application requires a DSC, PAN, Aadhaar number, photograph, and address proof. Once allotted, the DIN must be quoted in all MCA filings and communications.
DIN for SPICe+ incorporations
For the very first directors of a new company being incorporated via SPICe+, a provisional DIN can be allotted as part of the SPICe+ process itself - a separate DIR-3 filing is not required for first directors of new companies if DIN is applied within SPICe+.
Digital Signature Certificate (DSC)
A DSC is required to sign and file MCA forms electronically. Directors must obtain a Class 3 DSC from a licensed Certifying Authority (CA) recognised by the Controller of Certifying Authorities (CCA). A Class 3 DSC is valid for 2 or 3 years and must be renewed before expiry. The DSC is stored on a USB dongle (token) and requires the dongle to be plugged in during any MCA filing.
Documents required for DSC: PAN card, Aadhaar card, passport-size photograph, and a video verification with the Certifying Authority.
Appointment Process
Obtain a DSC
Apply for a Class 3 DSC from a licensed Certifying Authority. This takes 2 to 5 working days including video verification.
Apply for DIN via Form DIR-3
File DIR-3 on the MCA21 portal using the DSC. The DIN is typically allotted within 1 to 2 working days if the application is in order.
Obtain consent to act as director - Form DIR-2
The proposed director must sign Form DIR-2, a declaration of willingness to act as a director and confirmation that they are not disqualified. This is obtained before the Board meeting.
Board resolution appointing the director
The Board of Directors passes a resolution appointing the new director, noting their DIN and the date of appointment. For an Additional Director, this resolution invokes the AOA provision granting the Board this power.
File Form DIR-12 within 30 days
File DIR-12 on the MCA21 portal within 30 days of the Board resolution. Attach: the Board resolution, DIR-2 consent, and the director's DIN details.
Update company registers
Update the Register of Directors (maintained under Section 170) with the new appointment details - DIN, address, date of appointment, and other mandated particulars.
Disqualifications Under Section 164
An individual is disqualified from being appointed as or continuing as a director if any of the following apply:
- Undischarged insolvent: Any person who has been adjudicated insolvent and not yet discharged is ineligible.
- Conviction involving fraud or moral turpitude: Any conviction by a court of an offence involving moral turpitude or fraud, and sentenced to imprisonment for 6 months or more. The disqualification lasts 5 years from the date of release.
- Non-filing disqualification (Section 164(2)): A director of a company that has not filed financial statements or annual returns for 3 consecutive financial years is disqualified from being a director of any company for 5 years. This disqualification is automatic - no court order is required.
- Court or Tribunal order: Any person restrained from being a director by an order of a court or the NCLT.
- Default in repayment of deposits: Any person who is a director of a company that has defaulted in repayment of accepted deposits and the default has continued for more than one year.
Frequently Asked Questions
QCan a foreign national be a director of an Indian company?
Yes. There is no restriction on foreign nationals being directors of Indian private limited companies. However, at least one director must be an Indian resident (present in India for at least 182 days in the calendar year). The foreign director still needs a DIN, obtained through Form DIR-3 with apostilled identity documents.
QHow many companies can one person be a director of?
An individual cannot be a director of more than 20 companies at a time. Of these, no more than 10 can be public companies. Independent directors of listed companies count toward this limit.
QWhat happens if DIR-12 is filed late?
Late filing of DIR-12 attracts a late fee of ₹100 per day. If not filed at all, the company and every defaulting officer face fines under Section 172 - ₹50,000 minimum up to ₹5 lakh.
QCan a director resign without the company filing the change?
A director can send a resignation notice to the company. If the company does not file DIR-12 within 30 days, the director can file Form DIR-11 independently on the MCA portal to put their resignation on public record and protect themselves from liability for post-resignation acts.
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