Removing a Director Under Company Act: Process, Guidelines, and Considerations

Removing a Director Under Company Act

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Removal of Director - Overview

It is possible to add or remove a director from the company at any time. There are different reasons why a director is removed and there are three different procedures based on the reason. Irrespective of that, Vakilsearch can help you with removing a director from your company and make the whole process easy for you.

Documents Required for a Director Removal

The following documents are needed for removal of director

Notice of Board Meeting:
Special Notice to Director
Resignation Letter
Form DIR-12
Board Resolution
Declaration by Director

Removal of Director: Reasons

A director can be removed for any of the following reasons:

If they incur any of the disqualifications specified under the Companies Act
If they absent themselves from board meetings over 12 months
If they enter into contracts or arrangements against the provisions of Section 184 of the Companies Act
If they are disqualified by an order of a court or tribunal
If they are convicted by a court of any offence and sentenced to imprisonment for not less than six months
If they have not abided by the terms and protocols mentioned in the Companies Act of 2013
If they have resigned voluntarily from their position.

Ways to Remove a Director

Director removal

There are 3 ways to removal of director from a company:

1. Removal of director - When the Directors Tender Their Resignation

The steps to be followed in this scenario are:

Step 1: Holding a board meeting by giving seven days of clear notice

Step 2: In the meeting, the board members will take note of the resignation

Step 3: Then they have to pass a resolution in a particular format to that effect

Step 4: After that, Form DIR-11 needs to be filed by the resigning director in his individual capacity

Step 5: The company has to file Form DIR-12 with the registrar of companies (RoC) along with the registration letter and the board resolution

Step 6: When all the forms are filled and the formalities for the Removal of Directot are done, the name of the director will be removed from the master data of the company on the Ministry of Corporate Affairs (MCA) website.

2. Director Remains Absent from the Board Meetings for 12 Months

Step 1: If a director absents himself from all the meetings of the removal of board of directors held over a period of twelve months, with or without seeking leave of absence from the board, they are considered to have vacated their office as per Section 167

Step 2: A Form (DIR-12) must be filed

Step 3: Upon completion of the formalities, the concerned director’s name will be removed from the database of the Ministry of Corporate Affairs (MCA).

3. Removal of Director by Shareholders

Step 1: A notice is sent to all the shareholders for a board meeting required to be conducted within seven days from the date of the issue

Step 2: Step 2: A resolution is passed to have a general meeting and then for the director removal, subject to the approval of the shareholders on the day of the meeting

Step 3: After providing a 21-day notice, the second meeting of shareholders is held to vote on the resolution passed earlier and who is being removed as the director by shareholders will be allowed to speak on their removal

Step 4: The shareholders must file Form DIR-12, along with the attachments of the board resolution, and an ordinary resolution

Step 5: Once all the formalities are over, the name of the concerned director is removed from the database of the Ministry of Corporate Affairs (MCA) and its website.

This is the simplified version of the whole process.The removal of director procedure has to be carried out carefully and should follow the procedure laid down in the Companies Act.

Why Credfy

Here is why you should choose Vakilsearch for the removal of director from your company:

Simple and speedy process

Experts will guide you through the whole process

A resolution drafted and forms filled & filed for you

You get the best support

All your queries will be answered.

Removing a Director Under Companies Act FAQ

By the director by giving their resignation
If the director is absent from board meetings for 12 months
By the shareholders, if they deem it necessary.

Yes, a company director can be removed without their consent. However, such removal calls for a strict procedure to be followed.

The minimum number of directors required is based on the type of company. For a one-person company, it is 1, for a private company it is 2, and a public company needs to have at least 3 directors.

A person cannot be appointed as a director if they don’t qualify under the AoA, if they are undischarged bankrupt, or if they are restricted by a court order.

A private company can have a maximum of 15 directors.

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