Directors in a company can step down, or the Board of Directors might wish to remove a Director for various reasons. If a Director wishes to resign, they can do so by submitting a resignation letter to the company and informing the ROC.
It is possible to add or remove a director from the company at any time. There are different reasons why a director is removed and there are three different procedures based on the reason.
To remove a Director, only two forms are required: E-form MGT-14 and E-form DIR-12.
Following the Director's removal, the company should complete post-compliance tasks, including:
Step 1: Hold a board meeting with seven days' clear notice.
Step 2: Note the resignation in the meeting.
Step 3: Pass a resolution in a specific format.
Step 4: The resigning director files Form DIR-11 individually.
Step 5: The company submits Form DIR-12 to the Registrar of Companies (RoC) with the resignation letter and board resolution.
Step 6: After completing all formalities, the director's name is removed from the company's records on the Ministry of Corporate Affairs (MCA) website.
Step 1: If a director misses all board meetings over twelve months, with or without seeking leave, they are considered to have vacated their office under Section 167.
Step 2: File Form DIR-12.
Step 3: After completing the formalities, the director's name is removed from the MCA database.
Step 1: Send a notice to shareholders for a board meeting within seven days.
Step 2: Pass a resolution in the general meeting for the director's removal, subject to shareholder approval.
Step 3: Hold a second meeting after a 21-day notice to vote on the resolution, allowing the director to speak on their removal.
Step 4: Shareholders file Form DIR-12 with board and ordinary resolutions as attachments.
Step 5: Upon completing formalities, the director's name is removed from the MCA database and website.
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Can a Director of a Company be removed without his consent?
Yes, a Director of a company can be removed without his consent under certain circumstances.
On what grounds a Director has to be removed?
The Office of the Director may happen to be vacated by the statute, death, or under the provision of the AOA or the Shareholders agreement.
Does a Director get compensation even after his removal?
Even after the Director is removed by the company, he is entitled to get the compensation and damages that are payable to him.
Can a Director be reappointed once he is removed?
No, a Director who is removed once cannot be appointed as a director again.
Who can't be a director of a company?
A person cannot be appointed as a director if they don't qualify under the AoA if they are an undischarged bankrupt, or if they are restricted by a court order.
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