Any private company should have at least two directors, and every public company should have at least three directors at any one time. Let us take a look at three potential scenarios during the dismissal of the director:
If the Director himself gives his resignation
The director appointed shall apply his resignation to the Board of Directors. In this scenario, the appropriate measures will be taken to withdraw his name from the directors’ register:
- The company shall schedule a meeting of the Board of Directors by providing a comprehensive notification of 7 days (Clear notice shall be 21 days notification except on the day that the notice was submitted and obtained.
- Whenever the Board meets, they may consult each other and determine whether or not to approve the resignation.
- When the Board recognizes the resignation of the Management, the Board shall enact a resolution approving the resignation.
- Since it has been approved, Form DIR – 11 must be submitted by the outgoing director together with the Board of Directors’ Resolution, Proof of delivery of the letter of resignation and a replica of the resignation letter.
- Although the registration of DIR – 11 is the obligation of the director, the form DIR – 12 is the duty of the firm to be registered with the Registrar of Companies together with the letter of resignation and the Board Resolution.
- Upon submitting all forms, the name of the director would be deleted from the firm’s master data on the website of the Ministry of Corporate Affairs.
To remove a Director suo-moto by the Board
The Organization has the power to dismiss the Director by introducing an Ordinary Resolution, provided that the Director has not been approved by the Central Government or the Tribunal.
- The meeting of the Board of Directors would be held by providing all directors 7 days notice. The directors will receive a special note reminding them of the dismissal of the director.
- The day of the meeting of the Board of Directors, a resolution for the calling of a special general meeting would be adopted together with a resolution for the resignation of the director according to the consent of the shareholders.
- A general meeting would be conducted with specific notice of 21 days. Members would be invited to decide on the matter at the conference. If the vote is in favour of the decision, the motion will be adopted.
- Before the bill is passed, the Director would be provided with the chance to be heard.
- Following the approval of the resolution, the same process will be adopted and the forms DIR – 11 and DIR – 12 would be submitted together with the same annexes to the Ordinary Resolution of the Council.
- Upon submitting the forms, the name of the director would be removed from the Ministry of Corporate Affairs website.
If the Director does not attend three Board Meetings in a row
Pursuant to section 167 of the Company Act, 2013, if the Director doesn’t really join a Board of Directors meeting for 12 months from the day on which he was absent from the very first Board meeting, even after giving proper notification of all meetings, the Board of Directors will be considered to have abandoned the office and to have filed a Form DIR – 12 b on his behalf and his name will be deleted from the Ministry of Corporate Affairs.
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