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:
- Firstly, the company will hold a Board Meeting to accept the resignation of the director.
- Also, after passing the resolution, director has to file Form DIR-11 along with board resolution and resignation letter.
- Also the board has to intimate ROC about the resignation of the director within 30 days in Form DIR-12.
- Then, after filing all the forms name of the director will be removed from the master data of the company on MCA.
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.
- A Board Meeting will be called by giving seven days’ notice to all directors informing about the removal of the director.
- During the Board Meeting, a resolution for holding Extraordinary general meeting will be passed along with a resolution for removal of the director subject to the approval of shareholders.
- Further, general meeting will be held giving 21 days clear notice and members have to vote on the matter.
- Further, the resolution will be passed if the decision is in the majority.
- Before passing the resolution, the director has opportunity of being heard.
- After passing of resolution Form DIR-11 and DIR-12 will be filed along with board resolution and ordinary resolution.
- After filing the forms name of the director will be removed from MCA.
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.
- Such special notice shall be given at least 14 clear days before the date of meeting at which resolution for removal of director is to be considered.
- A notice convening the meeting should be sent to all members.
- If not possible publish an advertisement in a circulated newspaper not less than 7 days before the meeting.
- Notice shall also be sent to director whose removal is to be considered.
- Moreover, the director has right to be present at the meeting and has right to be heard.
- Also, Members will pass a ordinary resolution to remove the director.
- Further, file Form DIR-12 with the ROC within 30 days of passing the resolution along with special notice received from shareholder, special notice given to the director concerned, a notice of EGM to other shareholders and copy of ordinary resolution passed at EGM.
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.
– 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.
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.
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.