DIN is pre requisite. Violations of such norms are defined as offenses with associated penalties
Concept of Non Board Director exists?
Dear Sir/Madam, Can we give a designation of a Director to our employee whom we don't want to take on the board of Directors. We want the employee to only have the designation of a director We DO NOT want him to participate in the board meetings & NOT be a part of Board of Directors & so we won't be applying for the DIN. 1)If this is not possible & we still give him the designation of Director without applying for a DIN no,what would be the implication on the company 2)If we can do this then what would be his roles & responsibilities.
Asked 6 years ago in Business Law
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6 Answers
1. IF a person is appointed as 'director" (executive director, nominee director, whatever....) THEN it is mandatory to obtain DIN, else a penalty of 25K becomes liable alongwith prosecution in a magistrates court.
2. The BOD and the Co. Secretary, becomes liable for the above violations.
3. To circumvent this, the person can be designated as "president /vice-president" ....
Without DIN he cannot be a director also once he is director he cannot be excluded from board meetings.
He will have complete authority as mentioned in MOA and AOA if he is director.
If you are making employee a director he has to take part in board meetings
2)
Any Person who is willing to appoint as Director in a Company/Limited Liability Partnership must have a Director Identification Number. DIN is a pre-requisite for becoming a Director.
3) he cannot be appointed as director without DIN
1. What is the purpose of making him Director without giving him any powers of a director, the purpose of making him a director may be defeated.
2. A company acts through two bodies of people – its shareholders and its board of directors. The board of directors are in charge of the management of the company's business; they make the strategic and operational decisions of the company and are responsible for ensuring that the company meets its statutory obligations.
Usually, if you are a director (or acting as a director), you are not personally liablefor paying the company's debts. This means that if the limited company does not pay its debts and a creditor takes court action, only the company assets are at risk.
Therefore a dummy director cannot be made to remain as director in the company's books.
You can't do the same. If you appoint him as director then you have to give him all his legal rights and responsibilities
