Remove Director
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Removal of Director
When a director resigns from a company, they must provide a resignation letter to the board of directors. This letter should include the effective date of the resignation and the reason for leaving the company. It is important for the director to ensure that their resignation is in compliance with the company’s bylaws and any applicable laws or regulations.
After the resignation letter is submitted, the board of directors must acknowledge the resignation and make arrangements to fill the vacant position. The board may need to hold a meeting to discuss the resignation and decide on a course of action. This may include appointing a new director or making other changes to the company’s leadership structure.
If the director who is resigning is also an officer of the company, such as a CEO or CFO, the resignation may also need to be reported to regulatory authorities or disclosed to shareholders. This can depend on the specific requirements of the company’s governing documents and any applicable laws or regulations.
duties and responsibilities that both the director and the company:
| Obligations on the part of the Director | Details |
|---|---|
| Submitting a resignation notice | A director can resign by submitting a written notice to the Board of Directors, which can be in the form of an email or a letter. |
| Forwarding a copy of resignation to the Registrar of Companies | The director should forward a copy of the resignation, along with the reason for resignation, in Form DIR11 and the prescribed fees to the Registrar of Companies within 30 days from the date of resignation. |
| Effective date of resignation | The effective date of resignation shall be the date on which the company receives the notice of resignation or the date specified by the director. The date of cessation entered in Form DIR12 should be the same as the effective date of resignation. |
| Attachments with Form DIR11 | The director is required to attach a notice of resignation filed with the company, proof of dispatch of the letter, and any other optional attachments. If the company sends an acknowledgement, it should also be attached. |
| Obligations on the part of the Company | Details |
|---|---|
| Consideration of resignation notice | The Board of Directors should consider the resignation notice and pass a resolution for accepting the resignation. The minutes of the meeting should be drafted accordingly. |
| Intimation to Registrar of Companies | Within 30 days of receiving the resignation, the Board of Directors should intimate the Registrar of Companies in Form DIR12 (as per Rule 15 of the Companies, 2014). |
| Inclusion of resignation in Director’s report | The resignation should be mentioned in the Director’s report of the annual general meeting and should also be reflected on the company’s website. |
| Attachments with Form DIR1 | The company is required to attach the notice of resignation (mandatory) and evidence of cessation, which can be the board resolution or the acceptance letter. |
Liability of Director after the resignation:
After a director resigns from their position, they may still be held liable for any wrongful acts or omissions that occurred during their time as a director. This is because the director’s fiduciary duty to the company continues even after they resign.
Additionally, a director may still be held responsible for any liabilities that were incurred during their tenure, such as outstanding debts or legal disputes. It is important for the director to ensure that all of their duties and responsibilities are properly discharged before resigning and that they have taken steps to minimize any potential liability.
Remove director
FAQ’s:
How to remove a Director from a Company? A board meeting will be conducted by giving notice 7 days before all the Directors, and the company can remove the authority to remove a Director by passing an ordinary resolution that is given to the Director.
Is the Director’s removal valid? Yes, the ordinary resolution that is passed is valid and does not need to be filed with the registered.
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? Yes, even after the Director is removed by the company, he is entitled to get the compensation 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.