An additional director is a person who is appointed by the Board of Directors of a company to the Board in a board meeting. He/she shall hold office only up to the next annual general meeting.
The following are the requirements for appointing an additional director:
- The company’s articles of association must permit the Board of Directors to appoint an additional director.
- The person appointed as an additional director must not be disqualified from being a director under the Companies Act, 2013.
- The person appointed as an additional director must give his/her consent in writing to the appointment.
The following are the rights and powers of an additional director:
- He/she has the right to attend and participate in all Board meetings.
- He/she has the right to vote on all matters that are voted on by the Board.
- He/she has the right to be appointed to any committee of the Board.
- He/she has the same liabilities and responsibilities as a regular director.
The term of office of an additional director is up to the date of the next annual general meeting of the company. However, the additional director can be reappointed by the Board of Directors at the annual general meeting.
MCQs on additional directors
- Which of the following is not a requirement for appointing an additional director?
- The company’s articles of association must permit the Board of Directors to appoint an additional director.
- The person appointed as an additional director must be a shareholder of the company.
- The person appointed as an additional director must not be disqualified from being a director under the Companies Act, 2013.
- The person appointed as an additional director must give his/her consent in writing to the appointment.
Answer: The correct answer is (b). The person appointed as an additional director does not need to be a shareholder of the company.
- An additional director can be appointed by the Board of Directors:
- At any time.
- Only before the annual general meeting.
- Only after the annual general meeting.
- Only with the approval of the shareholders.
Answer: The correct answer is (a). An additional director can be appointed by the Board of Directors at any time.
- The term of office of an additional director is:
- Up to the date of the next annual general meeting.
- Up to the date of the next board meeting.
- Up to the date of the next shareholders’ meeting.
- Up to the date of the next board meeting or shareholders’ meeting, whichever is earlier.
Answer: The correct answer is (a). The term of office of an additional director is up to the date of the next annual general meeting.