Appointment of a Director in Casual Vacancy

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By Gunjan Sinha, Associate, Business Advisory Services, Dezan Shira & Associates

Mar. 25 – If the Director of a company in India who was appointed at a general meeting of the shareholders vacates his position before the expiry of his tenure, the Board of Directors may choose to appoint a new Director to fill the casual vacancy, as per Section 262 of the Companies Act, 1956.

If the company’s Articles of Association do not provide any clauses that state otherwise, the newly appointed Director shall hold office only up to the date which the Director in whose place he is appointed would have held office. The new Director may also be considered for re-appointment during a general meeting.

Casual vacancy arises due to various reasons, such as:

  • Resignation by the Director
  • Disqualification of the Director
  • Death of the Director
  • Insolvency of the Director

Filing of return is necessary for the appointment of casual vacancy

A casual Director is not a Director by rotation. While proposing a person to be a regular Director in a general meeting, due notice of their appointment has to be received from a board member. After his induction as the new Director, a fresh return has to be filed with the Registrar of Companies through electronic filings.

Applicability to a privately owned company

A private company need not comply with the provisions of the appointment of a Director in casual vacancy as stipulated by Section 262 of the Companies Act, 1956. Such a company can fill casual vacancies if provided for in its Articles of Association. If there is no provision in the Articles of Association, casual vacancy can be filled in a general meeting by the consent of the shareholders.

Dezan Shira & Associates is a specialist foreign direct investment practice, providing corporate establishment, business advisory, tax advisory and compliance, accounting, payroll, due diligence and financial review services to multinationals investing in emerging Asia. Since its establishment in 1992, the firm has grown into one of Asia’s most versatile full-service consultancies with operational offices across China, Hong Kong, India, Singapore and Vietnam as well as liaison offices in Italy and the United States.

For further details or to contact the firm, please email, visit, or download the company brochure.

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