Removal of Director

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Hiral Vakil

PLC
Start & Run Business

Shareholders have to elect persons for managing the affairs of the company such persons are directors of the company. Directors in a company may need to resign or his removal of a director may be done by the board or shareholders.

1. RESIGNATION OF DIRECTOR:

The director will submit the resignation to the board. Company has to take the following steps:

2. REMOVAL OF DIRECTOR BY BOARD:

The company has the authority to remove a director by passing an Ordinary Resolution only if the Central Government or the Tribunal has not appointed such director.

3. REMOVAL OF DIRECTOR BY SHAREHOLDERS:

Shareholders holding not less than 1% of total voting rights or holding shares not less than five lakh rupees paid up can issue a special notice for removal of director.

4. IN CASE DIRECTOR DOES NOT ATTEND 3 BOARD MEETINGS IN ROW:

If director does not attend a board meeting for 12 months even after giving notice for all meetings it will be deemed that he has vacated the office also, DIR-12 will be filed and his name will be removed from MCA.


FAQs

What are the compliance’s for resignation/removal of director?

– DIR-9: A report by a company to ROC for intimating the disqualification of a director
– DIR-11: Notice of Resignation of a director to Registrar(By the director)
– DIR-12: Notice of Resignation of a director to Registrar(By the company)
– DIR-5 : Application for surrender of DIN
– DIR-10: Form of application for removal of disqualification of directors.

What are the rules for the removal of a director?

Section 169 of Companies Act, 2013 talks about the removal of a director by members. Following are few rules to be followed for the removal of a director.
– An ordinary resolution is required to remove a director.
– Director appointed by Tribunal under section 242 shall not be removed.
– Independent director if reappointed for the second term shall be removed by Special Resolution only.

How long does it take to remove a director from a company by a member?

The member who proposes the dismissal must give the company ‘Special Notice’ of a resolution to remove a director at least 14 days prior to the meeting at which the director may be removed.

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