Draft Resolutions for Appointment of Alternate Director

In accordance with the provisions of sub-section (2) of section 161 of the Companies Act, 2013, the Board of Directors 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.

The person, who is going to be appointed as an alternate director for any director, shall not be a person already holding any alternate directorship for any other director in the company or holding directorship in the same company.

Such appointment by the Board of Directors is possibly only if so authorised by the articles of the company or by a resolution passed by the company in general meeting.

Broadly speaking, there could be three scenarios wherein the appointment of Alternate Director can be done.

(1) In case the Articles of Association of a Company does have a provision regarding Appointment of Alternate Directors

Draft Board Resolution for Appointment of Alternate Director in such cases:

#. To Appoint Ms. .................. as an Alternate Director to Mr. ................, Executive Director

“RESOLVED THAT pursuant to Section 161(2) and all other applicable provisions of the Companies Act, 2013 and rules made thereunder, including any statutory modification(s), enactment(s) or re-enactment(s) thereof for the time being in force, and in terms of the provisions of Article ... of the Article of Association of the company, Ms. ...................... be and is hereby appointed as an Alternate Director to Mr. .................., Executive Director during his absence from India and who shall vacate his office as and when Mr. ....................., Executive Director returns to India.”

(2) In case the Articles of Association of a Company does not have any provision for Appointment of Alternate Directors

Draft General Meeting Resolution authorising the Board of Directors for Appointment of Alternate Directors

#. Appointment of Alternate Directors

To consider and if thought fit, to pass, with or without modification(s), the following resolution as an Ordinary Resolution:

“RESOLVED THAT pursuant to Section 161(2) and any other applicable provisions of the Companies Act, 2013, including any amendments or re-enactments thereof for the time being in force), the Board of Directors of the company be and is hereby authorised to appoint an Alternate Director to act for any Director (hereinafter called 'the Original Director') during his absence for a period of not less than three months from India and that an alternate director shall vacate his office as and when original director returns to India.”

Explanatory Statement under Section 102 of the Companies Act, 2013

The directors of the company have been frequently travelling out of the country to deal with different business matters on behalf of the company. In the absence of such directors, it has become necessary that alternate directors be appointed during their absence to handle the affairs of the company.

Section 161(2) of the Companies Act, 2013 provides that 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 an alternate director to act for a director during his absence from India.

Since the Articles of Association of the company does not have any provisions regarding the appointment of alternate directors, the proposed resolution seeks the necessary authority of the general meeting to enable the board of directors to appoint alternate directors as and when such necessity arises.

All the directors are deemed to be interested in the resolution as set out at Item No. ... of the accompanying notice.

The Board recommends the passing of the resolution as set out at Item No. ...

(3) In case of addition of a New Article in the Alteration of Association of the Company for Appointment of Alternate Directors

Draft Special Resolution for Alteration of the Articles of Association of the Company for Appointment of Alternate Directors:

#. Alteration of the Articles of Association for Appointment of Alternate Directors

To consider and if thought fit, to pass, with or without modification(s), the following resolution as a Special Resolution:

“RESOLVED THAT pursuant to Section 14 and any other applicable provisions of the Companies Act, 2013, including any statutory amendment(s) thereto or re-enactment(s) thereof, the Articles of Association of the company be and is hereby amended by the addition of a new Article .... for Appointment of Alternate Director as follows:

"The Board may appoint any person to act as an Alternate Director for a Director (hereinafter called as ‘the Original Director’ in this Article ...), subject to the provisions of section 161(2) of the Companies Act, 2013, during the absence of the Original Director for a period of not less than three months from India.

An Alternate Director shall be entitled to notice of meetings of the Board and to attend and vote thereat accordingly, but he shall ipso facto vacate office if and/when the Original Director returns to India."

RESOLVED FURTHER THAT (Name of the Person), (Designation) be and is hereby authorised to file necessary form with the Registrar of Companies, ........... and to perform all acts, deeds, things and execute such documents as may be necessary to give effect to the foregoing resolution.”