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Remove A Director

Only companies contain  directors in their board and the company doesn’t include any Limited Liability Partnership, Sole proprietorship, Partnership, etc. it means the company which is registered under Companies Act, 2013. Directors are an important part of the company for running the operation and for the growth of the company as the director takes the major decision for the development of the company. Therefore a better board of directors can give a better direction to the company for achieving its goals. The main focus of the directors in promoting the value of the company and give benefits to the shareholders of the company. So to maintain this the company can appoint or remove the director from its board. The resignation or removal of the director is the normal change for the company. The company can appoint any director anytime or can remove any director from his position for the smooth function of the company.

The company not only can remove the director but the director can itself gives his resignation and the shareholders can even remove the director. But the company has to maintain the minimum limit of the directors in the company. The minimum limit of the director in a Public company is 3, in a Private limited company is 2 and one person company is only 1. So the companies shall maintain this limit all the time during its life, if in any situation this limit falls then the company needs to maintain this limit within 6 months. There are different situations where a director can be removed from his position of directorship. Once the director of the company is removed from his position then the company needs to intimate the Registrar regarding such removal within 30 days from the date of the resolution passed for such removal.

Who Can Remove A Director

The director can be removed by the board of director on  suo-moto or by the shareholders or by the government or a director can himself give his resignation from the director’s position. A director can be removed only in the meeting of the company. If any director is appointed by the Tribunal (NCLT) or Court then only the Tribunal or Court can remove that director from the company. Whenever the director is removed from the company, the company is responsible to intimate the Registrar of its jurisdiction regarding such removal.

Ways To Remove A Director In A Company
NOT PRESENT IN BOARD MEETINGS If a director fails to attend consecutive 3 board meetings during 12 months in a year with or without leave of absence then as per section 167 of the companies act, 2013 it will be considered as that the director has vacated the office. The company has to file DIR-12 and intimate the Registrar for removal of such director due to absence from the meeting After filing of DIR-12 the registrar will remove the name of the director from its register and will update on the MCA database. BY A SPECIAL NOTICE A director appointed can be removed in the general meeting of the company by passing ordinary resolution except if the director is appointed by the either by the tribunal or he is appointed under section 163 of the companies act, 2013. A special notice is required for the removal of the director and the procedure is as follows: A board meeting shall be called by circulating seven days notice to all directors before the meeting In the Board meeting of the company, a board resolution shall be passed for the removal of the director along with calling of the general meeting A notice for calling the general meeting shall be circulated to all the shareholders and directors along with the notice for removal of the director at least 21 clear days before the meeting In the general meeting, the shareholders of the company will decide the removal of the director and if majority members make their decision in favor of removal of the director then the director has to vacate his position from the directorship of the company An opportunity of being heard shall be given to the director before passing any resolution for his removal in the meeting Once the resolution for removal of a director is passed the company has to file DIR-12 along with the copy of the resolution passed to the registrar for the intimation of such removal After receiving the form from the company the registrar will remove the name of the director from its register as well as from the MCA database and the registrar will update such change on its website. BY DIRECTOR ITSELF A director can resign itself from the position of the directorship of the company by giving his resignation letter to the board of directors of the company. A director can anytime gives his resignation there is no restriction on it but the resignation should be in written no oral resignation is acceptable. After receiving the resignation letter the process will be as follows: The director should send his resignation letter in writing to the board of directors of the company After receiving the resignation letter the company has to conduct the board meeting for passing the resolution for acceptance of the resignation. For holding the meeting the company has to circulate 7 days prior notice to all the director At the board meeting, the director will discuss the matter of resignation and they may accept the resignation of the director. After acceptance of the resignation, the board needs to pass a board resolution for such After passing board resolution for the removal of director the company needs to file the form DIR-12 for such resignation of the director along with the resignation letter and board resolution. The form will be signed by the existing director of the company by his DSC After receiving the form the registrar will remove his name from the directorship of the company and will update it on master data of the company on the MCA website.
Required Documents for Removal of a Director’s Process
The required documents can be elaborated as per the two steps in the procedure:
Form DIR-11 Filing:

This form is required to be submitted at the time of removing the Director from the organization. Here, two documents are needed to be attached –

  • Resignation Letter of the concerned Director
  • Digital Signature Certificate of the concerned Director
Form DIR-12 Filing:

This form is required to be submitted at the time of removing the Director from the organization. With this form, the documents that are needed to be attached-

  • Resignation Letter of the concerned Director
  • Board Resolution regarding the Removal of Director process
How we work?
  1. Filling up the Form and Completing Payment
  2. Our Specialised CA Panel will calling you for details
  3. Upload the Documents & Details as requested over call
  4. Filing and Processing of Removal of Director will be Done!
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FAQ
What is the procedure for removal of a Director?
The shareholders and the Board can arrange for a meeting by giving a 7-day notice to all the existing directors. In the meeting, the decision for removal of the Director can be taken unanimously by sending a notice to the concerned Director.
What is the cause for removal of a Director from an organization?

The process may takes place for different reasons, such as:

  • The appointed Director is not attending the Board Meeting for more than 12 months in a row
  • Resignation is filed by the concerned Director himself/herself
  • The Director is convicted by a Court and Sentenced to Imprisonment
  • Ineffectiveness of the existing Director
  • Hiring new Expertise on board
  • If the Director is suffering from Mental Disorder or becomes Bankrupt
  • The concerned Director is not responding to the Notice sent by the Organization
What are the required documents in the Removal of the Director process?

In the process, the required documents are namely:

  • Resignation Letter of the concerned Director
  • Board Resolution
  • DSC of the Concerned Director
  • Personal Credential of the Concerned Director
How many Directors an entity can employ in India?

The number of Directors differ on the basis of classification of the organization:

  • For Public Company: Minimum 3 Directors
  • For Private Company: Minimum 2 Directors
  • For One-Person Company: 1 Director
How long does it take in the Removal of Director process?

Usually, an organization can proceed with an unanimously accepted Notice from the Board Meeting to complete the removal process within 14 days.