Resignation of Director


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    Resignation Of Director

    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.

    Resignation Letter Format

    Take a look at the format for the resignation:

    Date, Month, Year,
    To,
    The Chairman / Secretary
    Company Name
    City, State, Pin Code

    Subject: Resignation from the Office of Director of the Company

    Dear Sir/Madam,

    I hereby tender my resignation from the office as the Director of the ————– (Company name) with immediate effect or mention the resignation date. Notice of my resignation letter should be submitted to the Registrar of Companies and the Board of Directors should be informed in the next board meeting conducted.

    I sincerely thank the Board of Directors for giving me this opportunity and timely assistance to discharge my duties during my tenure as a Director of the company.

    I request the Board of Directors to please provide me with an acknowledgment of the resignation and a copy of the E-form DIR-12 filed with the Registrar of Companies to that effect for my reference and record.

    Thanking You,

    Yours faithful,
    Name of the Director.

    resignation of director from a company

    If The Director Is Absent From The Previous Three Board Meetings In A Row

    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.

    Obligation on the part of the Director who is resigning from the post

    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:

    • Notification of the resignation or a letter of resignation.
    • Proof of the dispatch letter.
    • Any acknowledgment document received from the firm.
    • Attachments of a voluntary nature may be used to store additional information.

    Obligations owed to the company

    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.

    Resignation Acceptance Letter by the Company

    Date/Month/Year

    To,
    Name of the Director who has resigned,
    Address.

    Subject: Acknowledgement of Resignation

    Dear Sir/Ma'amMa'am

    Concerning your resignation letter dated 20XXXX. In this regard, the Board of Directors has accepted your resignation w.e.f—, the Board meeting will be held on—–

    The Board of Directors sincerely appreciates your association with the company and the support you have offered during your tenure.

    We wish you all the best in your new endeavors.

    Thanking you,
    Your Faithful,
    For Company Name
    Director.

    Director Obligations Following Resignation and After

    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.

    Procedures for the Removal of the 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.

    FAQs(Frequently Asked Questions)

    How is a director removed from a company?

    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.

    Can you remove a company director without their consent?

    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.

    What happens if all directors resign?

    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.

    What resolution is required to remove a 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.