Page 289 - DMGT407Corporate and Business Laws

Corporate and Business Laws

Notes (c) Allotment of DIN (s.266B). The Central Government shall, within one month from the
receipt of the application under s.266A, allot a DIN to an applicant.
(d) Prohibition to obtain more than one DIN. No individual, who had already been allotted
a DIN under s.266B, shall apply, obtain or possess another DIN.
(e) Obligation of director to intimate DIN to concerned Company or Companies (s.266D). Every
existing director shall, within one month of the receipt of DIN from the Central
Government, intimate his DIN to the company or all companies wherein he is a
director.
(f) Obligation of company to inform DIN to Registrar (s.266E). This section provides that
every company shall, within one week of the receipt of intimation under s.266D,
furnish the DIN of all its directors to the Registrar or any other officer or authority,
as may be specified by the Central Government.

(g) Obligation to indicate DIN (s.266F). This section provides that every person or company,
while furnishing any return, information or particulars as are required to be furnished
under the Act, shall quote the DIN in such return, information or particulars in case
such return, information or particulars relate to the director or contain any reference
of the director.
(h) Penalty for contravention of provisions of sections 266A, 266C, 266D or 266E, (s.266G). If
any individual or director, referred to in s.266A or 266C or 266D or a company
referred to in s.266E, contravenes any of the provisions of those sections, every such
individual or director or the company, as the case may be, who or which, is in
default, shall be punishable with fine which may extend to ` 5000 and where the
contravention is continuing one with a further fine which may extend to ` 500 for
every day after the first during which the contravention continues.
4. Appointment of Directors. The appointment of directors rests in the following hands:
(a) Subscribers to the Memorandum- s.254; Clause 64 (Table A); (b) Company in general
meeting - Ss. 255-57; 263-265; (c) Board of Directors - Ss.260, 262, 313; (d) Central Government-
s.408; (e) Third parties - s.255.
Appointment of First Directors. The first directors are usually named in the articles of a
company. The Articles may, however, instead of naming the first directors confer power
on the subscribers, or majority of them to appoint the directors. Where the appointment is
to be made by the majority of subscribers, the majority of them (and not only the quorum
fixed by the Articles) should be present if the appointment is to be valid. Where there are
no Articles or the Articles neither name them nor confer any such power on the subscribers,
then Clause 64 of Table A in Schedule I to the Act confers powers on the subscribers or a
majority of them to make the appointment of first directors. Furthermore, if the Articles
neither name them, nor do they contain a provision for their appointment by the subscribers
and Table A is excluded, then the subscribers to the memorandum who are individuals are
deemed to be the first directors of the company until the directors are duly appointed at a
general-meeting of the company in accordance with the provisions of s.255.

Appointment of Subsequent Directors. Sections 255 and 265 provide for three schemes for the
constitution of the Board of Directors of a public company or a private company which is
subsidiary of a public company. These are: (i) All the directors retire at every Annual
General Meeting [s.255]; or (ii) At least two-thirds of the total number of directors must be
persons whose period of office is liable to determination by retirement by rotation (s.255);
or (iii) At least two-thirds of the directors may be appointed by the principles of
proportional representation, by a single transferable vote by a system of cumulative
voting or otherwise and shall be directors for a period of three years at a time (s.265). The

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