The Procedure For Removal Of A Director

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Section 1: Resignation of a Director

Procedure of Resignation of Director:

1Step 1: NotificationThe director willing to resign must submit a resignation letter to the company’s board of directors.
2Step 2: Board MeetingA board meeting should be convened to discuss and accept the resignation, typically following the provisions of the Articles of Association.
3Step 3: Filing with Registrar of Companies (ROC)After accepting the resignation, the company must file relevant forms with the ROC to ensure compliance with legal procedures.

Director Resignation Letter:

A director’s resignation letter should be formal, specifying the date of resignation, reasons for resignation, and a statement of the director’s fulfilment of any obligations. A sample resignation letter is available on our website, which can be a helpful template.

Section 2: Removal of a Director

1Step 1: Board Resolution:The board may pass a resolution to remove a director if they believe it’s in the company’s best interest. This should be done in accordance with the provisions of the Companies Act.
2Step 2:Shareholder Approval: Depending on the company’s Articles of Association, shareholder approval may be required for the removal of a director. This is typically needed when the director in question was appointed by the shareholders.
3Step 3:Filing with ROCJust like in the case of resignation, the removal of a director should be reported to the ROC

Section 3: Expert Insights from CA Sanket Agarwal

Industry expert CA Sanket Agarwal, provides insights on the removal of a director:

“In the realm of corporate governance, the removal or resignation of a director is regarded as a significant matter. It is imperative to adhere to the prescribed legal procedures with precision to mitigate the risk of disputes. Companies should consistently engage legal counsel to guarantee adherence to the Companies Act and their Articles of Association.”

Frequently Asked Questions

What is the difference between the resignation and removal of a director?

Resignation is a voluntary act by a director, while removal is often initiated by the company or its shareholders.

Yes, a director can be removed without their consent if the legal procedures are followed.

What documents are needed for the removal of a director?

You’ll need the board resolution for removal and any documents required by the ROC, depending on the specific case.

What is Form DIR - 12 form for directors’ resignation?

Notice of Change/ appointment/Resignation of directors and other officials to the Registrar of Companies is given by filing Form DIR – 12 on the official portal of MCA.

What is Form DIR-11?

From the date of his resignation, within a period of 30 days the director resigning from his office shall forward to the Registrar, a copy of his resignation along with reasons for the resignation in Form DIR-11 with the fee as provided in the Companies (Registration Offices and Fees) Rules, 2014.

To inform the Registrar of Companies (ROC) about the resignation of a director, you need to submit Form No. DIR-11. This action is in accordance with the provision stated in Section 168(1) of The Companies Act, 2013 and Rule 16 of The Companies (Appointment and Qualification of Directors) Rules, 2014.

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