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At any one time, a private companies must have at least two directors, and a public corporation must have at least three directors. Consider the following three scenarios during the removal of a director:
Scenario I : Resignation given by Director himself - The board accepts the resignation of the concerned director. In this instance, the following measures will be performed to remove his name off the director's list:
The corporation will have a Board Meeting after giving seven days' notice.
During the board's meeting, they'll discuss the resignation and determine whether or not to accept it or reject it.
They will then pass a board resolution acknowledging his resignation in the following format:
RESOLUTION - Mr. XYZ's resignation is approved with immediate effect."
FURTHER RESOLUTION - The Board expresses its gratitude to MR. XYZ for his support and leadership throughout his term as a Director of the Company”
RESOLVED FURTHER - The company's directors be and are hereby jointly empowered to perform all actions, deeds, and things necessary to the aforesaid person's resignation from the directorship of the Company.
The existing director must file form DIR – 11 together with the Board Resolution, Proof of Delivery of the Resignation Letter, and a copy of the Resignation Letter after the resolution has been passed.
While the director is responsible for filing DIR – 11, the company is responsible for filing DIR – 12, which must be filed with the Registrar of Companies together with the Resignation letter and the Board Resolution.
After completing all of the forms, the director's name will be deleted from the Company's master data on the Ministry of Corporate Affairs website.
Scenario II : Suo-moto Removal of a Director by the Board - If a Director was not appointed by the Central Government or the Tribunal, the Company has the ability to remove him or her by passing an Ordinary Resolution.
All directors will be given seven days' notice before a Board Meeting is scheduled. The directors will get a specific notice advising them of the director's dismissal.
An extraordinary general meeting resolution and a resolution for the dismissal of the director will be passed on the day of the Board Meeting, subject to shareholder approval.
A general meeting will be conducted following a 21-day notice period. The members will be asked to vote on the issue during the meeting. The resolution will be passed if the majority agrees with the decision.
Prior to the resolution's passage, the director will have the opportunity to be heard.
To file forms DIR-11 and DIR-12 along with the same attachments as a Board Resolution, Ordinary Resolution, the same procedure will be followed after a Board Resolution, Ordinary Resolution.
The director's name will be removed from the Ministry of Corporate Affairs website after the paperwork are filed.
Scenario III : Director fails to attend three consecutive Board meetings - As to the Companies Act, 2013, if a Director does not visit a Board Meeting for 12 months, beginning from the day on which he was missing at the first board meeting, even after giving adequate notice for all the meetings, it would be regarded that he has abandoned the office and a Form DIR-12 will be filed on his name and his name will be removed from the Ministry of Corporate Affairs' database.