Stox N Tax

Change of Designation of Director to Managing Director / Whole-Time Director / Other Director – ROC Procedure & Formats

Introduction

A company may decide to change the designation of an existing director—such as appointing a Director as Managing Director (MD), Whole-Time Director (WTD), or changing from Managing Director to Director, etc.
Such change requires compliance under the Companies Act, 2013 and filing of necessary ROC forms within prescribed timelines.

This article explains the complete ROC procedure, applicable sections, forms, and formats required.

Applicable Provisions of Companies Act, 2013

SectionParticulars
Section 196Appointment of Managing Director / Whole-Time Director
Section 203Key Managerial Personnel
Section 152Appointment of Directors
Section 170Register of Directors
Section 117Filing of resolutions
Rule 8 & 8A of Companies (Appointment & Remuneration) Rules, 2014MD/WTD appointment

Common Scenarios Covered

  • Director → Managing Director
  • Director → Whole-Time Director
  • Managing Director → Director
  • Change in designation without change in DIN
  • Re-designation with or without remuneration change

ROC Procedure – Step by Step

Step 1: Board Meeting

  • Issue notice of Board Meeting
  • Pass Board Resolution for:
    • Change of designation
    • Fixing remuneration (if applicable)
    • Calling General Meeting (if required)

Step 2: Shareholders’ Approval (If Required)

  • Mandatory for:
    • Appointment of Managing Director / Whole-Time Director
  • Pass Ordinary or Special Resolution as applicable

Step 3: Filing of ROC Forms

FormPurposeDue Date
MGT-14Filing Board/Shareholders ResolutionWithin 30 days
DIR-12Change in designationWithin 30 days
MR-1Appointment of MD/WTD/KMPWithin 60 days

ROC Forms – Detailed Explanation

1️⃣ DIR-12 – Change in Designation

Used for updating designation of director without change in DIN.

Attachments:

  • Board Resolution
  • Shareholders Resolution (if applicable)
  • Appointment Letter
  • Consent to act as MD/WTD (Form DIR-2)

2️⃣ MGT-14 – Resolution Filing

Filed when:

  • Shareholders approval is required
  • Special Resolution passed

Attachments:

  • Certified copy of Resolution
  • Explanatory Statement
  • Notice of EGM/AGM

3️⃣ MR-1 – Appointment of MD / WTD

Mandatory when appointing:

  • Managing Director
  • Whole-Time Director
  • Manager

Attachments:

  • Board Resolution
  • Shareholders Resolution
  • Appointment Letter
  • Declaration under Section 196(3)
  • Terms & conditions of appointment

Formats for Attachments

📄 Board Resolution – Change of Designation

“RESOLVED THAT pursuant to the provisions of Sections 196, 203 and other applicable provisions of the Companies Act, 2013 read with applicable rules, consent of the Board be and is hereby accorded to redesignate Mr./Ms. ______ (DIN: ______) from Director to Managing Director / Whole-Time Director of the Company with effect from ____, on the terms and conditions placed before the meeting.”

RESOLVED FURTHER THAT any Director of the Company be and is hereby authorised to file necessary forms with the Registrar of Companies and do all such acts as may be required.”

📄 Shareholders Resolution (Ordinary)

“RESOLVED THAT pursuant to Sections 196, 197 and other applicable provisions of the Companies Act, 2013, approval of members be and is hereby accorded for the appointment of Mr./Ms. ______ as Managing Director of the Company for a period of ___ years with effect from ___.”

📄 Consent to Act – DIR-2

I, Mr./Ms. ______ (DIN: _____) hereby give my consent to act as Managing Director / Whole-Time Director of ________ Private Limited, pursuant to Section 152 of the Companies Act, 2013.

📄 Declaration under Section 196(3)

I hereby confirm that I am not disqualified to be appointed as Managing Director under the provisions of Section 196(3) of the Companies Act, 2013.

📄 Appointment Letter – Key Clauses

  • Designation
  • Tenure
  • Remuneration
  • Duties & responsibilities
  • Termination clause

Important Compliance Points

  • DIR-12 is mandatory even if no remuneration change
  • MR-1 required only for MD/WTD/Manager
  • MGT-14 not required for pure board-level redesignation
  • Remuneration beyond limits requires Special Resolution

Penalty for Non-Compliance

DefaultPenalty
Late DIR-12₹100 per day (Max ₹1,00,000)
Late MGT-14Additional fees up to 12 times
Non-filing MR-1Company & officer in default liable

Conclusion

Change of designation of a director is a routine but sensitive ROC compliance. Proper resolutions, correct form selection, and timely filing help avoid penalties and future compliance issues.

Leave a comment

Timeline of events