Resignation Letter by Director has to be filed along with DIR- 11 with the ROC. Learn more about director resignation
Overview:
If the director of a company wishes to resign or the board decides to terminate a director for several reasons. The Director of a company can quit the board by documenting a resignation letter with the company and providing all the intimations to the Registrar of Companies (ROC).
A director may quit a company by providing notice in writing to the company and the board is expected to infer the ROC of such heed within 30 days in form DIR-12. In case the director selects, they may also deliver a document of the resignation letter to the ROC along with the explanations for resignation using form DIR-11.
Format of Resignation Letter by Director
Date: ———— To The Board of Directors [Name of the Company] [Address———-] Sub: Resignation Letter Dear Sir/Madam, I, ———————- R/o —————————————————–,Unfortunately, I must step down from my corporate directing post due to confidential and unavoidable circumstances. Please accept this letter as my resignation and let go of my duties. Please confirm receipt of this letter and go through the necessary procedures at the Registrar of Companies’ office..
Thanking You, Yours Faithfully Name of Director DIN: ————-
Obligation on the Directors Part Who Is Resigning
- A director can resign from his post by providing notice in writing to the board of directors of the company. An email or a letter to the firm is also an acceptable mode of transmission
- A copy of the resignation can also be sent along with the features of justification for the resignation to the Registrar of Companies(ROC) in form DIR-11 with the prescribed payments in the Companies Rules,2014 within 30 days from the date of resignation
- The effective date of resignation: It shall be in impact from the date on which the corporation has obtained in the resignation letter or the date the director has mentioned it in the resignation letter. The significant date of resignation shall be the same as the date of extinction that is attained in the form DIR-12
- With DIR-11 the director is also instructed to attach the following documents:
- The heed of the resignation that is documented with the Company (resignation letter can also be attached)
- Evidence of Dispatch of the letter
- If any disclosure that is earned from the Company and is required the Director has appointed Yes in form DIR-11
- Other evidence can also be furnished as optional attachments.
Obligation on the Companies Front
- The board of directors shall accept and consider the heed of resignation that is obtained and accordingly the filing should be initiated by the board for resigning it is essential to enroll the minutes of the meeting of the meeting
- The registrar should be informed through form DIR-12 (according to rule 15 of the Companies Act,2014) that the board of directors should be informed within 30 days from the date the submission is collected
- The board of directors should illustrate the resignation in the director’s report of the annual board meeting and it should also be published on the website of the Company
- The company is expected to assemble these documents while filing DIR-12 along with the heed of resignation and removal of directors
Liability of Director After the Resignation
The stability, responsibilities, and liabilities of directors are generally governed by the Companies Act, 2013. However, the responsibilities and liabilities of directors for specific actions are given under different legislations as discussed below.
(i) Liability under the Companies Act, 2013
Liability for default by a company has been committed on an ‘officer who is in default’ who is liable to a punishment prescribed under the Act. An ‘officer who is in default includes:
- A full-time director
- key managerial staff, if there is no key managerial staff, a director who has assented in writing to such specification, or if no such director is prescribed, all the directors
- Every director, regarding contravention of any of the requirements of the Act, who is familiar with such contravention or where such contravention has taken a position with his approval or connivance.
The Act also designates penalty for fraud, where someone shall be punishable with custody for a term not less than 6 months but which may expand to 10 years and a penalty which shall not be less than the percentage implicated in the fraud but which may expand to three times the percentage implicated in the fraud.
The Act differentiates the penalties of an administrative director from that of a non-executive director. Although a non-executive director is a board member, they do not provide for the day-to-day management undertakings of a company.
A non-executive director shall be responsible only in appreciation of such ordinances or mistakes by a company which happened with his understanding, attributable through the board procedures, with his approval or connivance, or where he had not worked diligently.
(ii) Liability under other legislations
The directors of a private company shall be responsible for the payment of tax privileges from the company. However, a director will not be responsible if he confirms that the non-recovery cannot be associated with any gross pay, misfeasance, or violation of duty on his portion in association with the relationships of the company.
What Is a Director’s Resignation Letter?
A letter of resignation from a director serves as a formal declaration expressing your decision to step down from your role as the director of a board, company, or any other organisational entity. This document clearly communicates your desire to vacate the directorial position and specifies the ultimate date of conclusion of your service. Beyond signalling your departure, the letter plays a crucial role in fostering a constructive professional rapport with the organisation you are departing from, affording them ample time to identify a suitable replacement before your exit.
A resignation letter is your chance to explain why you’re leaving and express gratitude for the opportunities the role provided. Considering the legal aspects of a director’s position, it’s wise to include a paragraph on potential legal challenges—seeking legal advice for this part is recommended. You can also offer to help with the transition by recruiting or training a replacement. Finally, share your contact information to stay open for future communication with the organisation.
Director Resignation Letter Examples
Depending on your position and the cause for your resignation, the contents of your letter of resignation as a director may change. Using the template as a guide, you can write a letter explaining why you are resigning using the following template:
Director Name
Address
Phone Number
Mail ID
Date
The Board of Directors
Company name
Address
To whom it may concern,
I, XXX, formally submit this letter to announce my resignation as the director of [Company Name]. I propose DD/MM/YYYY as my final day in this role. This decision follows a [. Reason for the resignation]
I express my gratitude for the six years I’ve served as director. I release any claims for compensation beyond DD/MM/YYYY and acknowledge the cessation of benefits outlined in my contract. My tenure has been marked by accomplishments, such as the growth of adult technology literacy classes and the inception of the YYY. I look forward to witnessing the continued success of the organisation post my departure.
For a seamless transition, I offer my assistance in the recruitment process for a new director. Feel free to contact me for recommendations, interviews, or support with onboarding.
Best regards,
Director Name
How Vakilsearch Can Help in the Removal of Directors
Removing a director from a company involves a lot of legalities. Both the company and the director must file DIR-12 and DIR-11 documents respectively. Non-filing of the forms within 30 days from the date of resignation may result in higher penalties. It is always crucial to provide the form with all the required details. This is where experts at Vakilsearch can provide a complete holistic service. Reach out to our experts for a simple and speedy process.
FAQs
What is the format of the director's resignation letter?
A header including your name, contact information (phone, email, and address) A formal greeting, like Dear CEO or Dear Chairperson of the Board A resignation letter that includes the effective date and the reasons for the resignation (optional) An expression of thanks for the chance and enjoyable interactions with the company A proposal for help during the transition.
How do you formally resign as a director?
To learn about any specific notice requirements or resignation procedures, review the terms of your employment contract or service agreement Send the board of directors a formal resignation letter Mention how long you have been a director of this company If at all feasible, include the resignation date and the reasons for it Provide your contact information and close by wishing the personnel and organisation a prosperous future.
How do you write a resignation letter from a Board of Directors?
Here are a few tips for writing a resignation letter from the board of directors. A board of directors resignation letter should be written as follows: Be professional at all times Indicate your resignation date and attempt to provide as much advance notice as you can Give a brief explanation of your resignation Using a very upbeat tone, thank the group and the firm for the experience If at all possible, offer your assistance with other organisation efforts that take less time.
How do I write a notice to the company of the resignation of the director?
Mention how long you have been a director of this company: If at all feasible, include the resignation date and the reasons for it Appreciate the support from the management and personnel Lend your support to the successor Provide your contact information Finish by wishing a prosperous future for the company and its employees This is an illustration of a letter of resignation for a corporate director.
How can a director resign from a Pvt Ltd company?
Call a board meeting and provide a clear seven-day notice Talk about the resignation with the other board members Adopt a resolution recognising the director's resignation The director who is quitting must make sure that his Form-32 is filed In accordance with Section 168 of the Companies Act of 2013 and Rule 15 of the Companies (Appointment and Qualification of Directors) Rules of 2014, give written notice to the Board and the Company.
How to resign from director Pvt Ltd?
The following procedures are involved in a director's resignation in a private limited company: Announce the upcoming board meeting in writing Adopt a resolution recognising the resignation of the director Submitting Form DIR-12 to ensure that the resignation is successfully registered with the RoC A director who plans to step down must give written notice to both the Board and the Company The Board must notify the ROC in Form DIR-12 of this notice within 30 days.
