The cause for a director's departure from a corporation might be that the director himself wishes to retire, or the Board of Directors could have decided that the director's position should be eliminated. A firm director can step down from their position on the board of directors by submitting a resignation letter and informing the ROC of the same. By adhering to the correct protocol, Legaltaxpert assists the director in resigning from their position. A notice of resignation from the director was given to the corporation. A Director may resign from their position with the firm by submitting their resignation in writing to the corporation. Form DIR-11 allows a director to explain why they are resigning along with a copy of their resignation letter sent to the ROC.
Take a look at the format for the resignation:
Suppose a director does not attend a board meeting for 12 months, starting from the day he was missing at the first board meeting, even after providing adequate notice for all of the arrangements that have been conducted. In that case, the Director violates Section 167 of the Companies Act of 2013. It will be assumed that he has resigned, and a Form DIR-12 will be filled up using his name. In addition, his part in the Ministry of Corporate Affairs would be terminated.
The obligation that falls on the shoulders of the Director who is leaving their position:
A director can step down from his position by providing the Board of Directors with written notification or an email or letter.
Within the first thirty days after resigning, a copy of the resignation and an explanation of the cause for the resignation may be provided to the employer. It is sent to the Registrar of Companies in the form of DIR11, together with the fees that the Companies Rule requires for 2014. Within the first thirty days, after the resignation is submitted, a copy of the concession should be provided to the employer. The date on which the company received the Director'sDirector's resignation or any other specified date indicated by the Director is the date that will be considered the effective date of the concession. On the other hand, the date that your resignation takes effect should be the same as the date of cessation listed on form DIR 12.
In addition to the DIR-11, the Director expects the following papers to be presented to them:
1. Following the notice of resignation, the Board of Directors will vote on a resolution to accept the resignation at their next meeting. It is required that a draft of the minutes be drafted for the meeting presided over by the Board of Directors.
2. Following Rule 15 of the Companies Act of 2014, the Registrar has to be informed using Form DIR12, and the Board of Directors needs to be announced within thirty days beginning on the day the resignation is accepted.
3. Rule 15 of the Companies Act of 2014 states that the Board of Directors must announce the outcome of the resignation within thirty days of receiving the resignation. During the company's annual meeting, the Board of Directors must bring up the subject of the directors' concessions, and this information should also be published on the business's official website.
The following items have to be submitted by the firm to complete Form DIR1:
– Disclosure of intent to resign.
– Evidence of the termination might be provided as a letter expressing board acceptance or resolution.
After the board of directors has accepted the Director'sDirector's resignation, the Director is no longer responsible for any obligations that occurred after the date on which the resignation was accepted.
However, the Director is still responsible for any violations while in charge of the organization, even if those violations happened before they became a director.
A director may be removed from their position before the end of their term if the corporation chooses. The shareholders possess all the authority necessary to remove the Director from their position. Take a look at the following for further information on the procedure for eliminating directors:
1. Basic Requirements
Removing directors cannot be made more personal without first providing the prospective Director with an opportunity. According to the legislation, this is the most fundamental need. The person who has broken the rules is given a chance to explain themselves before being kicked out of the group.
2. Notification to be distributed
It is recommended that a notice be sent as the first step in dismissing a director. Shareholders must send out the notification with a minimum voting power of 1% or by someone who possesses a share worth a value of Rs. 500,000 on the day the notice is due. The notification needs to have the signatures of every Director. A piece of information will be sent to the company fourteen days in advance of the general meeting that will be held to pass the resolution. For the notice to be legitimate, it must be distributed at least three months before the day on which the meeting is scheduled to take place.
3. Warning to the Members
The prospective Director must get a copy of the notice, regardless of whether or not they are currently affiliated with the firm. The notification has to be provided seven days in advance of when the resolution meeting is scheduled to take place.
If the shareholders cannot deliver the notice personally, it may be published in any newspaper, both in English and in the shareholders' native language. Additionally, the notification needs to be published on the official website of the organization at least seven days before the scheduled day of the meeting.
4. Documentary evidence or representation
The Director in question has the option of asking the firm to object to the removal notice and make a submission on their behalf. All of the members may get representation if they so want. The presentation should be communicated to every group member by sending a piece of information. If the organization cannot invite all members to the meeting, the Director may ask to read their representation instead.
5. Objections lodged with the Tribunal
If the Director of the firm attempts to smear the reputation of the business or sends material superfluous via their representation, a petition may be filed with the Tribunal. The Tribunal has complete discretion over whether or not to proceed with the representation procedure. A director also has the power to claim expense reimbursement for an application paid for by the firm.
The director may be vacated by statute, his or her death, or any provision related to the Articles of Association of the company or shareholders agreement.
Yes, a company director can be moved with any prior notice. As per Section 262 of CMA, a company can remove a director before the expiration of his office period.
When a single director resigns, Companies House will inform the company to hire a new director. If the company fails to hire any director, a shareholder can conduct a general meeting to appoint a new director.
Under Section 168 of the Companies Act 2006, shareholders can remove the director by passing an ordinary resolution (majority vote should be above 50%) in a company’s general meeting.