Directors are generally appointed as per the applicable provisions of the Companies Act 2013, by the shareholders of the company to ensure that the day to day operations of the company are executed in an efficient manner. They have a fiduciary duty to the company and its shareholders, which means to say that they are responsible for conducting the affairs of the company in a way that ensures success and profitability and thus enhancing the image of the company and its reputation.
The change in the directorship of a company is possible at any time as and when needed. The change can be either voluntarily or through demand. The demand arises in case there is a requirement of an expert in the board or due to resignation or death of an existing director.
The provisions of the Companies Act, 2013 read along with the Companies (Appointment and Qualification of Directors) Rules, 2014 sets down the procedure for the change in Directors.
Removal only happens before the expiry of the director’s term. This can be made possible by passing an ordinary resolution at the General Meeting of the shareholders, but only after giving the director a reasonable opportunity of being heard.
a) Notice of the resolution
– A notice of the resolution for the removal of the director will be circulated to all the necessary persons at least 7 days prior to the meeting.
– Where the notice cannot be delivered due to unavoidable circumstances:-
1. It can be published in the newspapers. (One in English and the other one in the regional language)
2. The notice must be posted on the company’s website.
– Once this notice is received, the company shall send a copy to the concerned director.
– He will be entitled to be heard at the General Meeting where the resolution is to be passed.
b) Written Representation
– A representation against his removal may be made in writing by the director.
– He may further request that the representation be circulated to all the members.
– A notice regarding the same will have to be issued to the members.
– Where circulation is not possible, he may request it to be read at the meeting.
C) Filing with the ROC
Form DIR – 12 has to be filed with the Registrar within 30 days from the date of resignation of the director along with the prescribed fees and the necessary attachments.
This form has to be filed with the particulars of appointment of directors and key managerial personnel and the changes among them. The details mentioned below have to be entered in:
– Details of the company.
– Details regarding the number of directors, managers etc.
– The date of cessation or the date of appointment, as the case may be.
– Respective DINs and DSCs to be affixed wherever necessary.
1. Declaration of the director to be appointed.
2. In case of removal/resignation-
a. Notice of resignation.
b. Evidence of cessation.
3. Any other optional attachments.
This form is to be filled for the purpose of giving notice of resignation of the director to the Registrar. The following details have to be entered in:
Although the company goes on, credit to the perpetual succession and separate legal entity features, it has to abide by the provisions of the Companies Act, 2013, and the specified rules by filing the relevant forms within the stipulated time with the relevant authorities.
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