A notice of resolution to remove a director can be sent at any time during their term unless the article of association states that they are a lifetime Director.
Every private company should have a minimum of two directors whereas a public company shall have a minimum of three directors. A company can remove a director if he incurs any of the disqualifications specified under the Act, absents himself/herself from board meetings over 12 months. And, enters into contracts or arrangements against the provisions of section 184, and is disqualified by an order of a court or Tribunal, or is convicted by a court of any offense and sentenced to imprisonment for not less than six months.
To remove a director from a company, he/she should have not abided by the terms and protocols according to the Companies Act, 2013, or can himself come up with resignation or misses to attend the board meeting for three continuous times in a year. Now, let us look at the procedure to remove a director in three different circumstances in detail:
Shareholders hold the authority to remove a director, as per Section 169 of the Companies Act 2013. The process can be done by passing an ordinary resolution in a general meeting, except in the case the Director was not appointed by the Central Government or the Tribunal.
There are several steps in which the removal process can take place:
The director of the company, for any reason, wishes to resign from the post of a director, then he/she can continue by passing a resolution initially to the company. Follow the below-mentioned steps to know the procedure on how the process the resignation of a director in a company.
the resignation of the (Director Name) and is hereby accepted with an immediate effect.FURTHER RESOLVED THAT
the Board places on record its appreciation for the assistance and guidance provided by the (Director Name) during his tenure as Director of the Company.RESOLVED FURTHER THAT
directors of the company are and are hereby jointly authorized to do all the acts, deeds and things which are obligatory to the resignation of an aforesaid person from the directorship of the Company.
If a director didn’t attend the Board meeting for 12 months (a year), then the absenteeism has to be taken seriously. The duration is calculated from the day on which he/she was not available from the first meeting and to any of the meetings, even after sending him/her due notice for all the meetings. It will be considered that he/she has abandoned the office and respective steps will be taken as per section 167 of the Companies Act, 2013. Correspondingly, a Form DIR-12 should be filed on the missing director’s name. Further, after the formalities, the respective director’s name will be removed from the Ministry of Corporate Affairs.
Within 30 days from the date of resignation, if the company fails to or doesn’t file the form DIR-12, then the following penalty will be applicable. e-Form DIR-12 is also available.
By ordinary resolution, the director can be removed before the expiry of his period of office, provided he does not hold office for life. Special notice of any resolution to remove a director must be sent by the company to the director concerned. The director (whether or not he is a member of the company) shall be entitled to be heard on the resolution at the meeting.
The company should wait for an explanation from him. If no reply is received, special notice must be given and, through members' approval, the director can be removed. File the DIR-12 with the Registrar of Companies. Within 10 to 15 days, the director will be removed.
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