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OVERVIEW
REMOVE A DIRECTOR
According to Section 252, every public company (except from those made public by virtue of Section 43A) must have at least three directors. With the caveat that a public company with (a) a paid-up capital of at least five crore rupees and (b) Atleast 1,000 small shareholders may have a director elected by those small shareholders in accordance with any applicable regulations whereas each private limited company should have at least two directors.
Reasons for removal of a Director
- If they gave their post a voluntary resignation.
- If they skip more board meetings than 12 months
- If any of the exclusions stated in the Companies Act apply to them
- If they violate Section 184 of the Companies Act by entering into agreements or contracts or if a court or other authority declares them ineligible
- If they are found guilty by a court of any crime and given a minimum sentence of six months in prison
- If they have disregarded the conditions and guidelines outlined in the Companies Act of 2013
DOCUMENTS REQUIRED
DOCUMENTS REQUIRED FOR REMOVAL OF DIRECTOR
- Passport-size Photograph
- Self-attested PAN card Copy
- Address Proof (Aadhar Card/ Voter ID/ Passport/ Driving License)
- Notice of resignation filed with the company
- Digital Signature Certificate (DSC of the ongoing Director and Director to be removed)
- Contact number and E-mail Id of the director
- Proof of dispatch
- Acknowledgement form (if any)
Note:
If the director is a non-resident of India, it is necessary to submit all the documents that have been apostilled.
REMOVE A DIRECTOR
HOW TO REMOVE A DIRECTOR?
In a firm, a director may be fired in one of three ways:
1. When the directors offer their resignation, the director is removed. In this case, the actions to take are:
- Convene a board meeting with seven days advance notice.
- The board members will note the resignation during the meeting.
- Following that, they must adopt a resolution in a specific manner to that effect.
- The resigned director must then complete Form DIR-11 in his/her capacity.
- The company must submit Form DIR-12, the registration letter, and the board resolution to the registrar of companies (RoC).
- The director’s name will be deleted from the company’s master data on the Ministry of Corporate Affairs (MCA) website once all documents have been completed and the formalities for the Removal of Director have been completed.
2. If the director fails to attend 12 consecutive board meetings.
- As per Section 167, a director is deemed to have resigned from office if they skip all of the board meetings that the removal of directors has over a year, whether or not they ask for a leave of absence.
- Submit a Form (DIR-12).
- After the requirements, the name of the concerned director will be purged from the Ministry of Corporate Affairs database (MCA).
3. Shareholders’ right to remove a director
- All shareholders will be given notice of a board meeting that must be held within seven days of the issuance date.
- On the day of the meeting, the shareholders must approve a resolution calling for a general meeting and the subsequent removal of the director.
- Following giving shareholders a 21-day notice, the second meeting of shareholders is conducted to vote on the earlier-passed resolution and to allow those who are being removed as directors to speak for their removal.
- The shareholders must submit Form DIR-12, an ordinary resolution, and the board resolution’s attachments.
- After the necessary processes have been completed, the name of the concerned director is purged from the Ministry of Corporate Affairs (MCA) database and website.
SUBMIT FORM DIR-12
CONSEQUENCES OF FAILING TO SUBMIT FORM DIR-12:
- DIR-12 must be submitted by 30 days after the resignation date.
- The following sanctions will be imposed if the business doesn’t comply:
- within 60 days – twice as much in government fees
- within 90 days – 4 times as much in government fees
- If it is beyond 90 days, ten times as much in government fees
- 180 days or more will result in 12 times the government fines and a booking for the compounded offence.
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