Remove A Director
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The accomplishments of a company’s directors serve as the platform upon which a business is built. Your company’s success can be made or broken by the directors you choose to lead it. Either way, you need strong leadership. Therefore, it is absolutely necessary for shareholders to exercise extreme vigilance during the process of director selection.
According to Section 169 of the Companies Act of 2013, a company has the right to dismiss a director before the end of his or her term in office. In addition, if the Central Government chooses to appoint a director, the removal of the director will be rendered null and void. Each and every private company is required to have a minimum of two directors, while each and every public company is required to have a minimum of three directors at any given time.
The first thing that needs to be done is to call a meeting of the Board of Directors and give at least seven days’ worth of clear notice, which is equivalent to giving 21 days’ notice if you take into account both the day it was sent and the day it was received. Following this, the Board of Directors will deliberate and decide whether or not to accept the resignation of the director. The Board of Directors will vote on a resolution to accept the director’s resignation after they have first accepted the director’s resignation.
The subsequent action that the Board of Directors and the outgoing director are required to take is to submit a Form DIR – 11. Attach a copy of the resignation letter and a proof that it was delivered along with the form. Also include a copy of the resignation letter. After that, the company is required to submit a form DIR – 12 with the Board Resolution and the resignation letter to the Registrar of Companies (ROC). Last but not least, once all of the forms have been submitted, the name of the director will be removed from the master data of the company that is stored on the official portal of the MCA.
A “Special Notice” of a resolution to remove a director must be given by the member proposing the removal at least 28 days prior to the meeting from which the director may be excluded.
The Company may have no other choice but to request the removal of the Director after consulting with the Board and a majority of shareholders in accordance with the Company’s (AOA).
If a person does not meet the requirements of the AoA, is an undischarged bankrupt, or is subject to a court order restricting them, they cannot be appointed as a director.
A shareholder can appoint a director in a private company under the Companies Act of 2013, so they should ideally be the only ones with the power to remove directors. However, in proprietary companies, if the constitution permits it, the removal of a director may be started by a majority of the directors.
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