Appointment of new Director in SECP

After receiving subscription capital, company members decided to appoint directors. These appointed directors automatically retired in first Annual General Meeting.

In first AGM, number of directors fixed which can only be change in upward scenario through elections u/s 162 of Companies Act 2017.

Therefore, when fixing the number of directors in first Annual General Meeting, make sure that select the number of directors which can be manage easily in future scenarios because once fixed it can’t be reduce as per section 162 of CA, 2017.

Scenario 1:

Mr. A, Mr. B and Mr. C establish a company and decided to appoint two directors Mr. A and Mr. B but after sometime Mr. C shows interest in board of directorship. So, he may join board as director at any time.

Scenario 2:

Mr. A, Mr. B and Mr. C establish a company and decided to appoint all three persons as director. But later on, Mr. C decided to quit the board for whatever the reason is. In this case, number of directors which were fixed as 3 at time of First AGM, can’t be reduced to 2. So, if Mr C wants to quit, he needs to add another Person in the board Mr. D then he is able to resign from the board. Otherwise there is vacant slot arise in the BOD.