Director and Share Change Services

A change of director – appointing a new director, accepting a resignation, removing a director or changing a director's designation – and a change in shares – allotment, transfer, transmission or an increase in authorised capital – each need board or shareholder approval, entries in the company's registers and a filing with the Registrar of Companies, usually within 30 days. IMAK Advisory, an ICAI-registered CA firm in Bengaluru, handles every change of director and change in shares for private companies, public companies, one person companies and LLPs across India, and checks the tax, FEMA and stamp duty effects of each change before it is made.

Most problems with these changes come from timing and paperwork: a resignation never reported, so the former director still appears on the MCA record; shares transferred without board approval or stamp duty; an allotment to investors made before the money reached the separate bank account; or an increase in shareholding that quietly wiped out the company's tax losses. This page explains each type of change of director, the appointment of director and resignation of director process, removal of director, DIR-12 and DIR-3 KYC, share transfer, allotment of shares, increase in authorised capital, change in registered office and the other events we handle.

• Appointment of director, additional director, managing or whole-time director
• Resignation of director and removal of director
• DIR-12, DIR-11 and DIR-3 KYC filings
• Allotment of shares: rights, private placement, preferential, bonus and ESOP
• Share transfer and transmission, including demat transfers
• Increase in authorised capital and alteration of the memorandum
• Change in registered office, name or objects
• LLP partner and designated partner changes

For each change of director or change in shares, we prepare the full set of papers and file the forms, so the board minutes, the registers and the MCA record all say the same thing.

1. Understand the change, check the articles of association and any shareholders' agreement
2. Check eligibility: DIN, disqualification, minimum and maximum limits, residency, investor consent
3. Draft notices, board resolutions, shareholder resolutions and explanatory statements
4. Collect consents, declarations and disclosures from directors and shareholders
5. Prepare and certify the MCA forms and attachments
6. File within the deadline and track approval
7. Update the statutory registers and share records
8. Check tax, FEMA and stamp duty effects and the related filings

A change of director covers every event that adds a person to the board, removes one, or changes a person's role on it. Each has its own approval and filing.

The DIR-12 is filed by the company and certified by a practising professional. It must reach the MCA within 30 days; filing after that is possible with additional fees, but a long delay can lead to penalties on the company and its officers.

The appointment of director – the most common change of director – is straightforward when the person already has a Director Identification Number (DIN) and the articles allow the board to act. It takes longer when a DIN must be obtained, when the person is a foreign national, or when investors' consent is needed under a shareholders' agreement.

1. Check the articles, the shareholders' agreement and the limits on the number of directors
2. Confirm the person is not disqualified under section 164 and holds a valid, KYC-compliant DIN
3. Obtain the consent to act in Form DIR-2 and the declaration in Form DIR-8
4. Pass the board resolution appointing an additional director, or call a general meeting for appointment by shareholders
5. Obtain the disclosure of interest in Form MBP-1 at the first board meeting
6. File DIR-12 within 30 days, with the consent, declaration and resolution
7. Update the register of directors and key managerial personnel
8. Regularise an additional director at the next general meeting

A person without a DIN can obtain one through Form DIR-3, with identity and address proof and a digital signature. A foreign national needs a passport and an overseas address proof, usually notarised or apostilled, and may need a registered Indian mobile number for the MCA process. We plan these documents in advance, because they are the usual cause of delay.

Additional, Alternate and Nominee Directors

An additional director holds office until the next annual general meeting and must be regularised by shareholders. An alternate director acts for an original director who is out of India for at least three months. A nominee director is appointed by an investor, lender or the government under an agreement or law. Each type has its own resolution and DIR-12 attachments.

Independent and Women Directors

Listed companies and specified public companies must appoint independent directors and at least one woman director. Independent directors must be registered in the independent directors' databank and meet the independence conditions. Private companies are generally outside these requirements.

A director may resign at any time by giving notice in writing to the company. The resignation takes effect from the date the company receives the notice or the date stated in it, whichever is later. The company must report the resignation in DIR-12 within 30 days, and the director may also file Form DIR-11 with the reasons, which is optional for most cases but useful where the director fears the company will not report it.

• Written resignation letter with the effective date and, preferably, the reasons
• Board meeting or circular resolution noting the resignation
• DIR-12 filed by the company within 30 days
• DIR-11 filed by the director if needed
• Register of directors updated
• Bank mandates, digital signatures on the company's account, and authorised signatories changed

A resignation does not end liability for acts done while in office. Before the resignation of director is accepted, the board should check that the company will still meet the minimum number of directors and the resident director requirement; if the only remaining director resigns from a private company, the company cannot function until a new appointment is made.

Shareholders can remove a director, other than one appointed by the tribunal, before the end of the term by an ordinary resolution at a general meeting under section 169. The removal of director requires a special notice from members holding the prescribed level of shares or voting power, a copy sent to the director, and an opportunity for the director to be heard and to make written representations, which are circulated to members. The removal is then filed in DIR-12.

Removal is the most contested change of director and often follows a dispute. The articles, the shareholders' agreement and any employment contract with the director should be checked, and an advocate should be involved where the director is likely to challenge it. A director also vacates office by law in specific cases, for example on disqualification or after being absent from all board meetings held in twelve months without leave; these vacations must also be reported.

DIR-12 is the e-form a company files to report the appointment, resignation, removal or change in designation of a director or key managerial personnel. It is the single most important form in any change of director, because the MCA master data – and everything banks, investors and government portals read from it – is updated only when DIR-12 is approved.

The form is signed with the digital signature of a director or the company secretary and certified by a practising chartered accountant, company secretary or cost accountant. A DIR-12 filed with a wrong DIN, a wrong date or a missing attachment may be marked for resubmission, so we check each attachment before filing.

Every person holding a DIN must keep KYC details – mobile number, email address and residential address – current with the MCA. Until 2025, this meant filing DIR-3 KYC every year by 30 September. Under the Companies (Appointment and Qualification of Directors) Amendment Rules, 2025, effective from 31 March 2026, DIR-3 KYC moved to a three-year cycle: a director files once in every third consecutive financial year, by 30 June of the following year. A change in mobile number, email or residential address must be updated within 30 days through the DIR-3 KYC web form, separately from the periodic filing.

A DIN that is not KYC-compliant is deactivated, and the person cannot be appointed or act on filings until it is reactivated by filing the form with the fee. Before any appointment of director, we check that the person's DIN is active and the KYC due date, so the DIR-12 is not blocked.

Each change of director also changes the company's internal records. A new director discloses interests in other companies and firms in Form MBP-1 at the first board meeting and each year after. Every year, directors confirm in Form DIR-8 that they are not disqualified. The company keeps a register of directors and key managerial personnel with their shareholding, and these records are checked during audits and inspections.

• MBP-1 disclosure of interest at first meeting and annually
• DIR-8 declaration of non-disqualification annually
• Register of directors and KMP updated within the time required
• Related-party transactions reviewed when a new director brings new interests
• Directors' report and annual return reflect the change

A company cannot issue shares beyond its authorised capital. Before a new funding round, a rights issue or a bonus issue, the increase in authorised capital must be approved and filed. The articles must permit it; if they do not, they are altered first by special resolution.

1. Check the articles and current authorised capital
2. Board meeting to approve the proposal and call a general meeting
3. Ordinary resolution of shareholders under section 61
4. Alteration of the capital clause of the memorandum
5. Form SH-7 within 30 days, with the resolution and altered memorandum, and payment of the fees and stamp duty
6. Update the memorandum copies kept by the company

The fees and stamp duty on an increase in authorised capital depend on the amount and the state, and can be significant. Increasing it only to the level needed for the planned issue, rather than far beyond it, is often sensible.

The allotment of shares is how a company raises money from existing or new shareholders. The route decides the approvals, the documents and the timelines.

Rights Issue

Existing shareholders are offered new shares in proportion to their holdings under section 62(1)(a), with a letter of offer open for at least the period required. Shares not taken can be offered to others as the board decides, if the offer allows it. PAS-3 is filed within 30 days of allotment.

Private Placement and Preferential Allotment

Shares offered to selected persons need a special resolution, a valuation report from a registered valuer where required, an offer letter in Form PAS-4, a record of the offer in PAS-5, and the money received through banking channels into a separate bank account. Allotment must be made within 60 days of receiving the money, or the money refunded within 15 days after that. The return of allotment in PAS-3 is due within 15 days of allotment. The money cannot be used until the allotment is made and the return filed.

Bonus Issue

Bonus shares are issued from reserves or securities premium, as permitted by the articles, after board and shareholder approval. Bonus shares cannot be issued in place of dividend.

ESOPs and Sweat Equity

ESOP schemes need a special resolution with prescribed disclosures, and allotments on exercise are reported in PAS-3. Startups have additional flexibility for promoters and directors under the rules.

Share capital issued to a foreign investor also needs FEMA pricing and reporting – the FC-GPR within 30 days of allotment – and the valuation for the Companies Act, FEMA and income tax should be planned together.

A share transfer moves existing shares from one person to another; no new capital comes into the company. In a private company, the articles usually restrict transfers – for example, by requiring shares to be offered first to existing shareholders or requiring board approval – and a shareholders' agreement may add rights of first refusal, tag-along and drag-along.

Private companies other than small companies, subject to the exclusions in the rule, must issue securities and allow transfers only in dematerialised form under Rule 9B of the Companies (Prospectus and Allotment of Securities) Rules. Companies that were not small companies on 31 March 2023 had until 30 June 2025 to comply; a company that ceases to be a small company later has 18 months from the end of that financial year. Before any share transfer, we check whether the company is covered and whether the shares are already in demat form.

Tax on a Share Transfer

The seller pays tax on capital gains. For unlisted shares, if the price is below fair market value, the law can deem the fair market value as the sale price for the seller and tax the difference as income in the buyer's hands, subject to exceptions such as transfers between relatives. A valuation report supporting the price is therefore important even in family transfers.

Transfers Involving Non-Residents

A transfer between a resident and a non-resident must follow the FEMA pricing guidelines and be reported in Form FC-TRS within 60 days.

When a shareholder dies, shares pass to the nominee or legal heirs by transmission, not by transfer. The company needs the death certificate, the nomination in Form SH-13 if one was made, or succession documents such as a succession certificate or probate, and indemnities as its articles require. The register of members is then updated. Transmission is not taxed as a transfer, but the heir's cost and holding period for a future sale follow the previous owner's.

Rule 9B changed how most private companies handle shares. A covered company must obtain an ISIN through a depository, help its shareholders open demat accounts, and ensure that promoters, directors and key managerial personnel hold their shares in demat form before any new issue or buy-back. Shareholders cannot transfer physical shares, and new allotments must be credited to demat accounts. We work with your registrar and transfer agent and depository participant to complete the process and to file the related return with the MCA.

A change in shares can change who ultimately owns or controls the company. Individuals who hold, directly or indirectly, at least 10% of shares, voting rights or dividend rights, or who exercise significant influence or control, are significant beneficial owners. They declare this to the company in Form BEN-1, and the company files Form BEN-2 within 30 days of receiving the declaration. Investments through trusts, LLPs or foreign holding companies often trigger these filings without anyone noticing.

A change in shares can affect more than the register of members. Before any significant allotment or transfer, we check these points:

• Tax losses: a closely held company can lose the right to carry forward business losses when more than 49% of the voting power changes, with a limited exception for eligible startups
• Startup recognition and incentives that depend on shareholding conditions
• FEMA reporting for non-resident shareholders
• Stamp duty on the transfer or issue
• Bank loan covenants requiring the lender's consent for a change in shareholding or management
• Licences and registrations that name shareholders or directors
• Change in control clauses in customer and supplier contracts

Many of these are easier to manage before the change. After the change, the options narrow.

A change in registered office within the same city or town is the most common and simplest; moving to another state is a longer process with notices to creditors and the Regional Director's approval. As with a change of director, the new details also need updating with GST, income tax, banks and other registrations.

LLPs report changes in partners and designated partners in Form 4 within 30 days, and changes in the LLP agreement in Form 3 within 30 days. Every LLP needs at least two designated partners, one of whom must be resident in India. Admission or retirement of partners often changes capital contributions and profit shares, which must match the LLP agreement and the books.

1. Short call to understand the change and the timeline
2. Document list and checks: articles, agreements, DIN status, shareholding
3. Draft resolutions, notices and declarations for your approval
4. Collect signatures and digital signatures
5. Prepare, certify and file the MCA forms
6. Track approval and handle any resubmission
7. Update registers and share records, and close related tax and FEMA filings
8. Send you a closing note with all acknowledgements

For investor rounds, we prepare a calendar covering the increase in authorised capital, the special resolution, the offer letter, the separate bank account, the allotment, PAS-3, FEMA filings and share certificates or demat credits.

We do not publish fees. The cost depends on the type of change, the number of directors or shareholders involved, whether a general meeting is needed, foreign national or non-resident involvement, valuation and FEMA work, and any delays to regularise. Government fees and stamp duty are paid directly. Our team shares the exact total after reviewing your requirements.

A Co-Founder Who Left Two Years Ago

A startup's co-founder resigned by email but the company never filed DIR-12, so he still appeared as a director and received tax notices about the company. We confirmed the resignation date from the email, filed DIR-12 with the additional fees and a DIR-11 for the former director, and updated the registers.

A Seed Round With an Investor From Abroad

A company needed to increase its authorised capital and allot shares to a US investor. We prepared the SH-7, special resolution, valuation, PAS-4 offer, separate account and PAS-3, and coordinated the FC-GPR so the allotment and FEMA reporting were completed within the deadlines.

A Family Share Transfer

A father wanted to transfer shares in the family company to his daughter. We checked the articles, the demat requirement, stamp duty and tax position, confirmed that the transfer between relatives did not create taxable income for her, and completed the transfer through the depository.

• Change of director not filed, so a former director stays on the MCA record
• Appointing a person whose DIN is deactivated for KYC
• Leaving the board below the minimum or without a resident director
• Allotting shares beyond the authorised capital
• Using share application money before allotment and PAS-3
• Transferring physical shares in a company covered by mandatory demat
• Ignoring the effect of shareholding change on tax losses
• Missing FC-TRS or FC-GPR where non-residents are involved
• Not updating bank mandates and authorised signatories

One Person Companies

An OPC has one director and one member, with a nominee. Conversion into a private company is needed when it wants more members.

Death of a Director

The office falls vacant on death, which is also a change of director; the company files DIR-12 and, if the board falls below the minimum, appoints a new director.

Directors Disqualified for Non-Filing

A director of a company that failed to file accounts or returns for three years can be disqualified from all boards; removal of the default and the disqualification needs a planned approach.

Changes in Section 8 Companies

Charitable companies need care with changes in objects, name and membership, and must keep their licence conditions.

• We do not backdate resolutions, resignations or allotments
• We do not file a removal without the director's right to be heard
• We do not act as advocates in shareholder disputes; an advocate should
• We do not allot shares before money is received through banking channels
• We do not quote government fees or stamp duty as our charges

If your company has a company secretary who handles board and share matters, you may need us only for the tax, FEMA or valuation side of a change. If the change is a simple update of a director's address or mobile number, the director can file the DIR-3 KYC web form directly. We will tell you if that is all you need.

1. What is changing, and from what date?
2. Do the articles and any shareholders' agreement allow it, and whose consent is needed?
3. Does every incoming director have an active DIN with current KYC?
4. Will the board still meet the minimum and resident director requirements?
5. Is the authorised capital enough for the planned allotment?
6. Is any shareholder or investor a non-resident?
7. Could the change affect tax losses, loans or licences?

A change of director or in shareholding is often sensitive – a founder leaving, a new investor, a family settlement. As chartered accountants we follow ICAI's confidentiality rules. Access is limited to named team members, and documents are shared only with the people you approve.

Use this list for each change of director or change in shares.

• Articles and agreements checked
• DIN and KYC status verified
• Consents and declarations collected
• Board and shareholder resolutions passed
• DIR-12, PAS-3, SH-7 or MGT-14 filed within 30 days (PAS-3 within 15 days for private placement)
• Registers and share records updated
• Demat requirement checked
• FEMA, tax and stamp duty effects closed
• Bank mandates and registrations updated
• Acknowledgements filed in the company's records

Our only office is in Whitefield, Bengaluru, where clients can meet us in person. MCA filings are online, so we handle each change of director and change in shares for companies and LLPs registered in every state. We do not have offices outside Bengaluru.

What is the process for a change of director?

Approve the change by board or shareholder resolution as required, collect consents or the resignation letter, file DIR-12 within 30 days and update the registers.

Which form is used for appointment of director?

DIR-12, filed by the company within 30 days, with the director's consent in DIR-2 and declaration in DIR-8.

How does resignation of director work?

The director gives written notice, the company notes it and files DIR-12 within 30 days, and the director may file DIR-11.

How can shareholders carry out removal of director?

By an ordinary resolution at a general meeting after special notice, giving the director a chance to be heard, followed by DIR-12.

What is DIR-12?

The MCA form for reporting the appointment, resignation, removal or change in designation of directors and key managerial personnel.

How often must DIR-3 KYC be filed now?

From 31 March 2026, once in every third consecutive financial year, by 30 June, with changes in contact details updated within 30 days.

What happens if DIR-3 KYC is not filed?

The DIN is deactivated, and the person cannot act on MCA filings until it is reactivated with the form and fee.

How is an increase in authorised capital done?

By an ordinary resolution under section 61, if the articles allow, altering the memorandum, and filing SH-7 within 30 days.

What is the time limit for PAS-3 after allotment of shares?

15 days for private placement and 30 days for other allotments such as rights and bonus issues.

How is a share transfer done in a private company?

In demat form through depository participants for companies covered by Rule 9B; otherwise through Form SH-4, board approval and stamp duty.

Do private companies have to dematerialise shares?

Private companies other than small companies, subject to exclusions, must issue and transfer securities only in demat form under Rule 9B.

How is a change in registered office filed?

Within the same city by board resolution and INC-22 within 30 days; other moves need special resolutions and, in some cases, Regional Director approval.

Can a company have only one director?

Only a one person company. A private company needs at least two directors and a public company at least three.

Does a share transfer have tax consequences?

Yes. The seller may pay capital gains tax, and a transfer below fair market value can create taxable income for the buyer, with exceptions such as relatives.

What if a director resigned but the company did not file?

The company can still file DIR-12 with additional fees, and the former director can file DIR-11 with proof of resignation.

How much do director and share change services cost?

We do not publish fees. The cost depends on the type of change and the work involved, and our team shares the exact total after reviewing your requirements.

Company and LLP Setup · Annual ROC Compliance · Business Valuation · FEMA and FDI Compliance · Startup India Registration · Business Contracts

Share the company's name, the change of director or share change you plan, the people involved and the date. Our team will confirm the approvals, documents and forms needed.

Contact Details

Office Address

IMAK Advisory, ITPL Main Rd, Pattandur Agrahara, Whitefield, Bengaluru, Karnataka 560066, India

Phone

+91 79798 50684 (call or WhatsApp)

Email

imakadvisoryteam@gmail.com

Sources: Companies Act, 2013 (sections 42, 56, 61, 62, 149, 152, 161, 164, 168, 169); Companies (Appointment and Qualification of Directors) Rules, 2014, as amended by G.S.R. 943(E) (DIR-3 KYC from 31 March 2026); Companies (Prospectus and Allotment of Securities) Rules, 2014, including Rule 9B; Companies (Share Capital and Debentures) Rules, 2014; LLP Act, 2008. Checked 2 November 2026.