Where the Director himself gives his resignation
The concerned director submits his resignation to the Board. In this case, the following steps will be taken to remove his name from the register of directors:
- The company will hold a Board Meeting by giving seven days of clear notice (Clear notice means 21 days notice excluding the day on which the notice was sent and received.
- When the Board meets, they will discuss amongst themselves and decide whether to accept the resignation or not.
- Once the Board accepts the resignation of the director they will pass a Board resolution accepting the resignation in the following format:
- “RESOLVED THAT the resignation of Mr. XYZ be and is hereby accepted with immediate effect
- “FURTHER RESOLVED THAT the Board places on record its appreciation for the assistance and guidance provided by MR. XYZ during his tenure as Director of the Company”
- “RESOLVED FURTHER THAT directors of the company be and are hereby jointly authorized to do all the acts, deeds and things which are necessary to the resignation of aforesaid person from the directorship of the Company
- After the passing of the resolution, form DIR – 11 has to be filed by the outgoing director along with the Board Resolution, Proof of delivery of the resignation letter and copy of the resignation letter.
- While the filing of DIR – 11 is the responsibility of the director, form DIR – 12 is the responsibility of the company which has to be filed with the Registrar of Companies along with the Resignation letter and the Board Resolution.
- After filing all the forms, the name of the director will be removed from the master data of the Company on the Ministry of Corporate Affairs website.
To remove a Director suo-moto by the Board
A Company has the authority to remove a Director by passing an Ordinary Resolution, given the Director was not appointed by the Central Government or the Tribunal.
- A Board Meeting will be called by giving seven days’ notice to all the directors. A special notice will go to the directors informing them about the removal of the director.
- On the day of the Board Meeting, a resolution for the holding of an extraordinary general meeting will be passed along with the resolution for the removal of the director subject to the approval of the shareholders.
- A general meeting will be held by giving 21 days clear notice. In the meeting, the members will be asked to vote on the matter. If the majority is in favor of the decision, the resolution will be passed.
- Before the passing of the resolution, an opportunity of being heard will be given to the director.
- After the passing of the resolution, the same procedure will be followed, and the forms DIR – 11 and DIR – 12 will be filed along with the same attachments of the Board Resolution, Ordinary Resolution.
- After the filing of the forms, the name of the director will be struck off from the Ministry of Corporate Affairs website.
In case the Director does not attend three Board Meetings in a row
As per section 167 of the Companies Act, 2013 if a Director does not attend a Board Meeting for 12 months, starting from the day on which he was absent at the first board meeting even after giving due notice for all the meetings, it will be deemed that he has vacated the office and a Form DIR – 12 will b filed on his name and his name will b removed from the Ministry of Corporate Affairs.