As far as I have been able to work out, being assigned to the position of squad leader is a case of "first in". When you join a squad, you may notice that there is an order to it. If someone higher up than you then leaves the squad, everyone lower moves up a space. In this fashion, you can only become squad leader if you are in the second position and the squad leader leaves (you will be notified with a big heads-up "You are now the Squad Leader" notice).

As for making a squad mid-battle...not sure. But shall investigate.

As far as I have been able to work out, being assigned to the position of squad leader is a case of "first in". When you join a squad, you may notice that there is an order to it. If someone higher up than you then leaves the squad, everyone lower moves up a space. In this fashion, you can only become squad leader if you are in the second position and the squad leader leaves (you will be notified with a big heads-up "You are now the Squad Leader" notice).

Edit: It is possible to make a squad mid-battle.