Resignation of Director
Director of a company is a person elected by the shareholders for managing the affairs of the company as per the Memorandum of Association and Articles of Association of the company. Director in a company may need to resign or the Board of Directors or Shareholders may want to remove a Director for any reasons. In such cases, a Director can resign or be removed by filing the intimation of change of Director with MCA.
The procedure for resignation of director and removal of Director by the Board or Shareholders vary. A Director can resign from a company by giving a notice in writing to the company and the Board is required to file the necessary filings with MCA within 30 days. A Director can also send a copy of the resignation letter to the ROC directly by filing a different set of forms.
Highlights of Removal of a Director
These are the highlights of removal of a Director:
- Any company especially Private Limited Company can remove a Director by passing an ordinary resolution in an Annual General Meeting or an Extraordinary General Meeting as compared
- A casual vacancy caused by the removal of a Director from a Private Limited Company having only two Directors must be filled by the appointment of new Director within 6 months from the date of resignation of previous Director.
- Every company will keep all the records of all the registered employees and Directors according to the provisions of the Companies Act, 2013.
Conditions for the removal of a Director from a Company
According to the provisions of the Companies Act, 2013 shareholders can remove a Director before from his or her tenure expires, except in case of appointment by the Central Government. There could be mainly three possible cases for the removal of Directors from the company. They are as follows:
- If the Director didn’t attend the three consecutive board meetings
- Removal of Director Suo Moto by the Board.
- When the Director himself or herself submits his or her resignation.
Advantages of Remove Director
These are the advantages of the removal of the Director like;
- Director is a person who, with other Directors, is appointed by the members of Company to run business of the company on behalf of the company.
- Any person of 18 years and above can become Director of a Private Limited Company. A natural person of any nationality can become a Director in a Private Limited Company. The only condition is that there should be minimum one Indian resident as Director of Private Limited Company.
- Director of Company is identified with his Directors Identification Number – DIN.
- There has to be minimum two Directors in a Private Limited Company and three in a Public Limited Company.
- A Director can be added by members at any General Meeting by passing an ordinary resolution.
NOTE- A Director can be removed by members at General Meeting by passing an ordinary resolution.
Procedure for Removal of Director
These are the steps which comes under the process of removal of a Director:
- Special Notice
- Board Meeting
- Issue Notice
- General Meeting
Documents Required in Removal of a Director
These are the necessary documents required in the process of Removal of a Director:
- When the Director of a Company is Indian then in that case, Pan Card is mandatory. However, in the case of a Foreign National or NRI, a scanned copy of Passport is needed.
- Four passport size Photographs of the proposed Directors/shareholders.
- Address Proof is necessary the document must not be older than 2 months.
- Scanned copy of Voter’s ID/Passport/Driver’s License.