My private limited company has only one director after my co-director resigned. Is that allowed and what should I do?

Detailed Legal Analysis

Yes, a private limited company in India can have only one director, but it must comply with certain legal requirements outlined in the Companies Act, 2013.

As per Section 149 of the Companies Act, 2013, a private company must have at least two directors. However, if your private limited company has only one director due to the resignation of another, you must take immediate steps to appoint a new director to comply with the law.

Here are the steps you should follow to ensure compliance:

• Review the Company’s Articles of Association: Check the Articles of Association (AoA) of your company to understand the provisions related to the appointment and removal of directors.
• Appoint a New Director: You need to appoint a new director to ensure that the company complies with the minimum requirement of having at least two directors. You can do this by:
  • Identifying a suitable candidate who meets the criteria mentioned in Section 164 (Disqualifications for appointment of directors).
  • Obtaining a Digital Signature Certificate (DSC) and Director Identification Number (DIN) for the new appointee, if they do not already have one.
• Hold a Board Meeting: Conduct a board meeting to approve the appointment of the new director. Ensure that proper minutes are recorded.
• File Necessary Forms: After the appointment, you must file Form DIR-12 with the Registrar of Companies (RoC) within 30 days of the appointment to notify them of the change in director.
• Update Company Records: Update your company’s statutory registers, including the register of directors and the register of members, to reflect the new appointment.

Failure to comply with the requirement of having at least two directors could lead to penalties under the Companies Act, 2013, specifically under Section 167, which deals with the vacation of office by directors. Therefore, it is crucial to take timely action to rectify the situation and ensure that your company remains compliant with the law.