{"id":3161,"date":"2019-01-11T09:29:04","date_gmt":"2019-01-11T09:29:04","guid":{"rendered":"https:\/\/swaritadvisors.com\/learning\/?p=3161"},"modified":"2020-08-27T12:48:34","modified_gmt":"2020-08-27T07:18:34","slug":"want-to-remove-a-director-what-is-the-process","status":"publish","type":"post","link":"https:\/\/swaritadvisors.com\/learning\/want-to-remove-a-director-what-is-the-process\/","title":{"rendered":"Want to Remove a Director &#8211; What is the process?"},"content":{"rendered":"\n<p class=\"has-drop-cap\">The process of removing a director from the company could be done in three different ways. If the director of the company isn\u2019t active or has not attended any of the board meetings in the past twelve months even after several notices has been sent, then the company can perform <strong>removal of director<\/strong> even before his\/her term expires.<\/p>\n\n\n\n<p>In this blog, we have discussed the various <strong>procedures for removal of a director from the company.<\/strong> But let\u2019s first discuss a little about the directors and their role in the company.<\/p>\n\n\n\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_65 counter-hierarchy ez-toc-counter ez-toc-light-blue ez-toc-container-direction\">\n<p class=\"ez-toc-title\">Table of Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-6a309f382bcb8\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-6a309f382bcb8\"  aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/swaritadvisors.com\/learning\/want-to-remove-a-director-what-is-the-process\/#What_is_Removal_of_Director\" title=\"What is Removal of Director?\">What is Removal of Director?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/swaritadvisors.com\/learning\/want-to-remove-a-director-what-is-the-process\/#Conditions_for_the_Removal_of_director_from_the_company\" title=\"Conditions for the Removal of director from the company\">Conditions for the Removal of director from the company<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/swaritadvisors.com\/learning\/want-to-remove-a-director-what-is-the-process\/#Procedure_of_Removal_of_Director_from_the_Company\" title=\"Procedure of Removal of Director from the Company\">Procedure of Removal of Director from the Company<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/swaritadvisors.com\/learning\/want-to-remove-a-director-what-is-the-process\/#1_When_the_director_didnt_attend_three_consecutive_board_meetings_in_the_year\" title=\"1.&nbsp; When the director didn\u2019t attend three consecutive board meetings in the year\">1.&nbsp; When the director didn\u2019t attend three consecutive board meetings in the year<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/swaritadvisors.com\/learning\/want-to-remove-a-director-what-is-the-process\/#2_Removal_of_director_suo-moto_by_the_board\" title=\"2.&nbsp; Removal of director suo-moto by the board\">2.&nbsp; Removal of director suo-moto by the board<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/swaritadvisors.com\/learning\/want-to-remove-a-director-what-is-the-process\/#3_When_the_director_himselfherself_submits_the_resignation\" title=\"3.&nbsp; When the director himself\/herself submits the resignation\">3.&nbsp; When the director himself\/herself submits the resignation<\/a><ul class='ez-toc-list-level-4' ><li class='ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/swaritadvisors.com\/learning\/want-to-remove-a-director-what-is-the-process\/#RESOLVED_THAT\" title=\"RESOLVED THAT \">RESOLVED THAT <\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-8\" href=\"https:\/\/swaritadvisors.com\/learning\/want-to-remove-a-director-what-is-the-process\/#FURTHER_RESOLVED_THAT\" title=\"FURTHER RESOLVED THAT\">FURTHER RESOLVED THAT<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-9\" href=\"https:\/\/swaritadvisors.com\/learning\/want-to-remove-a-director-what-is-the-process\/#RESOLVED_FURTHER_THAT\" title=\"RESOLVED FURTHER THAT\">RESOLVED FURTHER THAT<\/a><\/li><\/ul><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-10\" href=\"https:\/\/swaritadvisors.com\/learning\/want-to-remove-a-director-what-is-the-process\/#Consequences_of_Not_Filing_DIR-12\" title=\"Consequences of Not Filing DIR-12\">Consequences of Not Filing DIR-12<\/a><ul class='ez-toc-list-level-4' ><li class='ez-toc-heading-level-4'><ul class='ez-toc-list-level-4' ><li class='ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-11\" href=\"https:\/\/swaritadvisors.com\/learning\/want-to-remove-a-director-what-is-the-process\/#Final_Words\" title=\"Final Words\">Final Words<\/a><\/li><\/ul><\/li><\/ul><\/li><\/ul><\/nav><\/div>\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"What_is_Removal_of_Director\"><\/span><strong>What is <\/strong>Removal of Director<strong>?<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>A director in the company plays a crucial role. He\/she is liable for implementing and determining the company\u2019s policy. Apart from this, there are several critical operations that directors are supposed to look after. Hence, it\u2019s imperative for <strong>directors of the company<\/strong> to participate in the organization\u2019s quintessential work.<\/p>\n\n\n\n<p>If the director of the company isn\u2019t actively participating in the company\u2019s operation and working, then the director is surely not beneficial. As a result, you should remove him or her. Let us discuss <strong>how we can remove a director and in what circumstances<\/strong>.<\/p>\n\n\n\n<div class=\"wp-block-button aligncenter\"><a class=\"wp-block-button__link has-background\" href=\"https:\/\/swaritadvisors.com\/removal-of-director\" style=\"background-color:#01669c\">Removal of Directors From the Company  &#8211; Apply Now <\/a><\/div>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Conditions_for_the_Removal_of_director_from_the_company\"><\/span><span style=\"color: #000000;\"><strong>Conditions for the <\/strong><\/span>Removal of director<span style=\"color: #000000;\"><strong> from the company<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p><span style=\"color: #000000;\">As per the <strong><em>provisions of the Companies Act 2013<\/em><\/strong>, Shareholders can remove a Director from the company even before his\/her tenure expires, except in case of <em>appointment by the Central Government<\/em>.<\/span><\/p>\n\n\n\n<p><span style=\"color: #000000;\"><em>Mainly, there could be three possible cases for the <\/em><span style=\"color: #00ccff;\"><strong><a rel=\"noreferrer noopener\" aria-label=\"removal of directors (opens in a new tab)\" href=\"https:\/\/swaritadvisors.com\/removal-of-director\" target=\"_blank\"><em>removal of directors<\/em><\/a><\/strong><\/span><em> from the company. They are as follows:<\/em><\/span><\/p>\n\n\n\n<ol><li><span style=\"color: #000000;\">In the case, the director didn&#8217;t attend three consecutive board meetings;<\/span><\/li><li><span style=\"color: #000000;\">Removal of director suo-moto by the board;<\/span><\/li><li><span style=\"color: #000000;\">When the director himself\/herself submits the resignation.<\/span><\/li><\/ol>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Procedure_of_Removal_of_Director_from_the_Company\"><\/span><span style=\"color: #000000;\"><strong>Procedure of <\/strong><\/span>Removal of Director<span style=\"color: #000000;\"><strong> from the Company<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<div class=\"wp-block-image\"><figure class=\"aligncenter is-resized\"><img decoding=\"async\" loading=\"lazy\" src=\"https:\/\/swaritadvisors.com\/learning\/wp-content\/uploads\/2020\/08\/44-1024x1024.jpg\" alt=\"director disqualification for removal\" class=\"wp-image-12552\" width=\"365\" height=\"365\" srcset=\"https:\/\/swaritadvisors.com\/learning\/wp-content\/uploads\/2020\/08\/44-1024x1024.jpg 1024w, https:\/\/swaritadvisors.com\/learning\/wp-content\/uploads\/2020\/08\/44-150x150.jpg 150w, https:\/\/swaritadvisors.com\/learning\/wp-content\/uploads\/2020\/08\/44-300x300.jpg 300w, https:\/\/swaritadvisors.com\/learning\/wp-content\/uploads\/2020\/08\/44-768x768.jpg 768w\" sizes=\"(max-width: 365px) 100vw, 365px\" \/><\/figure><\/div>\n\n\n\n<p><span style=\"color: #000000;\">Since there are three ways a <strong>director can be removed from the company<\/strong>, therefore, we will discuss all the three cases one by one. <em>Let&#8217;s begin with the one described first<\/em>&#8211;<\/span><\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"1_When_the_director_didnt_attend_three_consecutive_board_meetings_in_the_year\"><\/span><span style=\"color: #000000;\"><strong>1.&nbsp; When the director didn\u2019t attend three consecutive board meetings in the year<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p><span style=\"color: #000000;\">As per <strong><em>section 167 of the Companies Act, 2013<\/em><\/strong> if a director didn&#8217;t attend the Board Meeting for 12 months, starting from the day on which he\/she was absent at the first meeting even after sending him\/her due notice for all meeting, it will be considered that he\/she has abandoned the office.<\/span><\/p>\n\n\n\n<p><span style=\"color: #000000;\">A <strong>Form DIR-12<\/strong> should be filed on the director&#8217;s name.<\/span><\/p>\n\n\n\n<p><span style=\"color: #000000;\">Furthermore, for <strong>removal of director<\/strong> his\/her name will be removed from the <em>Ministry of Corporate Affairs<\/em><\/span><\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"2_Removal_of_director_suo-moto_by_the_board\"><\/span><span style=\"color: #000000;\"><strong>2.&nbsp; Removal of director suo-moto by the board<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p><span style=\"color: #000000;\">As per <strong>Section 169 of the Companies Act 2013<\/strong>, shareholders have the authority to remove the director by passing an ordinary resolution in a general meeting, except in the case the <em>Director was not appointed by the Central Government or the Tribunal<\/em>.<\/span><\/p>\n\n\n\n<p><span style=\"color: #000000;\"><em>There are several steps in which the <\/em><strong><em>removal process<\/em><\/strong><em> can take place:<\/em><\/span><\/p>\n\n\n\n<ol><li><span style=\"color: #000000;\">There should be a <strong>Board Meeting<\/strong> by offering seven days notice to all the directors. Furthermore, an exceptional notice will go to the directors informing them about the <strong>removal of the director<\/strong>.<\/span><\/li><li><span style=\"color: #000000;\">Next, a resolution for holding an extraordinary general meeting will be passed along with the resolution for the <strong>removal of the director<\/strong> subject to the <em>approval of the shareholders<\/em> on the day when the board meeting will be held.<\/span><\/li><li><span style=\"color: #000000;\">Again there would be a <em>general meeting by providing 21 days<\/em> clear notice to the directors. In the meeting, the members would be supposed to vote on the matter. If the majority votes in favour of the decision, then the resolution will be passed.<\/span><\/li><li><span style=\"color: #000000;\">But before the<em> resolution is actually passed<\/em>, the director will be provided with an opportunity for being heard.<\/span><\/li><li><span style=\"color: #000000;\">After the resolution is passed, the same procedure needs to be followed, and the <strong>Form DIR-11 and DIR-12<\/strong> must be filed along with the same attachments of the Board Resolution, Ordinary Resolution.<\/span><\/li><li><span style=\"color: #000000;\">After the form has been filed, the name of the director will be scratched off from the <strong>Ministry of Corporate Affairs website<\/strong><\/span> <a href=\"http:\/\/www.mca.gov.in\/\">[1]<\/a> <span style=\"color: #000000;\">.<\/span><\/li><\/ol>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"3_When_the_director_himselfherself_submits_the_resignation\"><\/span><span style=\"color: #000000;\"><strong>3.&nbsp; When the director himself\/herself submits the resignation<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p><span style=\"color: #000000;\">If by any means or reasons, the <strong>director of the company<\/strong> doesn&#8217;t wish to continue with the company and want to resign, then he or she can resign following the below-described steps:<\/span><\/p>\n\n\n\n<ol><li><span style=\"color: #000000;\">The company shall commence a <strong>Board Meeting<\/strong> by providing seven days of clear notice which implies 7 days notice excluding the day on which the notice was sent and received.<\/span><\/li><li><span style=\"color: #000000;\">In the meeting, the <strong>Board members<\/strong> will discuss with each and decide whether to accept the resignation or not.<\/span><\/li><li><span style=\"color: #000000;\">If they <strong>accept the resignation<\/strong>, they will further pass a Board Resolution a<em>ccepting the resignation in the following format<\/em>:<\/span><\/li><\/ol>\n\n\n\n<h4 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"RESOLVED_THAT\"><\/span><span style=\"color: #000000; font-size: 15px;\"><strong>RESOLVED THAT<\/strong> <\/span><span class=\"ez-toc-section-end\"><\/span><\/h4>\n\n\n\n<p><span style=\"color: #000000;\">the <strong>resignation of the director<\/strong> be and is hereby accepted with an immediate effect.<\/span><\/p>\n\n\n\n<h4 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"FURTHER_RESOLVED_THAT\"><\/span><span style=\"color: #000000; font-size: 15px;\"><strong>FURTHER RESOLVED THAT<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h4>\n\n\n\n<p><span style=\"color: #000000;\">the Board places on record its appreciation for the <em>assistance and guidance provided by the director during his tenure as Director of the Company<\/em>.<\/span><\/p>\n\n\n\n<h4 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"RESOLVED_FURTHER_THAT\"><\/span><span style=\"color: #000000; font-size: 15px;\"><strong>RESOLVED FURTHER THAT<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h4>\n\n\n\n<p><span style=\"color: #000000;\">directors of the company be and are hereby jointly authorized to do all the acts, deeds and things which are obligatory to the <strong>resignation of an aforesaid person from<\/strong> the directorship of the Company.<\/span><\/p>\n\n\n\n<ol><li><span style=\"color: #000000;\">After the resolution has been passed, <strong>Form DIR-11<\/strong> needs to be filed by the outgoing director along with the Board Resolution, <strong>Proof of delivery of the resignation letter<\/strong> and <strong>copy of the resignation letter<\/strong>.<\/span><\/li><li><span style=\"color: #000000;\">The director is accountable for the <strong>filing of DIR-11<\/strong>,<strong> Form DIR-12<\/strong> is the responsibility of the company which has to be filed with the <strong>Registrar of Companies (RoC)<\/strong> along with the <strong>Registration letter<\/strong> and the Board Resolution.<\/span><\/li><li><span style=\"color: #000000;\">Once all the forms are filed, the name of the director will be removed from the master data of the company on the <em>Ministry of Corporate Affairs website (MCAs)<\/em>.<\/span><\/li><\/ol>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Consequences_of_Not_Filing_DIR-12\"><\/span><span style=\"color: #000000;\"><strong>Consequences of Not Filing DIR-12<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p><span style=\"color: #000000;\">If the company fails to <strong>file the e-form DIR-12<\/strong> within 30 days of <strong>appointment or resignation<\/strong>, then the following penalty will be applicable:<\/span><\/p>\n\n\n\n<ul><li><span style=\"color: #000000;\">One time of actual Government fees until 15 days;<\/span><\/li><li><span style=\"color: #000000;\">Two times of the actual government fees if it exceeds more than 15 days;<\/span><\/li><li><span style=\"color: #000000;\">If it exceeds 30 days to 60 days, then a penalty of 4 times of the actual government fees is applicable;<\/span><\/li><li><span style=\"color: #000000;\">In case it exceeds 180 days, then 10 times of the actual government fees are applicable;<\/span><\/li><li>Also applicable to <span style=\"color: #000000;\">the company which fails to file the DIR -12 within 300 days from the date of passing the resolution, then the company is supposed to pay 12 times of the actual government fees plus compounding offense.<\/span><\/li><\/ul>\n\n\n\n<h4 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Final_Words\"><\/span><span style=\"color: #000000;\"><strong>Final Words<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h4>\n\n\n\n<p><span style=\"color: #000000;\">In a nutshell, if you want to<strong> remove a director of the company<\/strong>, in any case, you need to issue a clear notice for some specific days as described above. And, the final decision will be taken only if the Board Members vote in favour of the decision. Before <strong>passing the Board Resolution<\/strong>, the director will be given a chance to provide justification if any. If he\/she continues with the decision to leave abandon the company, then the Board Resolution will be passed.<\/span><\/p>\n\n\n\n<p><span style=\"color: #000000;\">The director is supposed to file the specific form as described above and <strong>submit it to the RoC<\/strong>. Lastly, the name of the director will be abolished from the company&#8217;s master data and from the MCA&#8217;s website.<\/span><\/p>\n\n\n\n<p><div class=\"shadow4\"><span>If you have any query regarding the process of removal of the director, then <a href=\"\/contact-us\"><strong>contact<\/strong><\/a> Swarit Advisors. Our experts will help you with your queries and provide you with the best solution.<\/span><\/div><\/p>\n","protected":false},"excerpt":{"rendered":"<p>The process of removing a director from the company could be done in three different ways. If the director of the company isn\u2019t active or has not attended any of the board meetings in the past twelve months even after several notices has been sent, then the company can perform removal of director even before [&hellip;]<\/p>\n","protected":false},"author":6,"featured_media":3164,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[559],"tags":[724,344,726,725],"_links":{"self":[{"href":"https:\/\/swaritadvisors.com\/learning\/wp-json\/wp\/v2\/posts\/3161"}],"collection":[{"href":"https:\/\/swaritadvisors.com\/learning\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/swaritadvisors.com\/learning\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/swaritadvisors.com\/learning\/wp-json\/wp\/v2\/users\/6"}],"replies":[{"embeddable":true,"href":"https:\/\/swaritadvisors.com\/learning\/wp-json\/wp\/v2\/comments?post=3161"}],"version-history":[{"count":31,"href":"https:\/\/swaritadvisors.com\/learning\/wp-json\/wp\/v2\/posts\/3161\/revisions"}],"predecessor-version":[{"id":12553,"href":"https:\/\/swaritadvisors.com\/learning\/wp-json\/wp\/v2\/posts\/3161\/revisions\/12553"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/swaritadvisors.com\/learning\/wp-json\/wp\/v2\/media\/3164"}],"wp:attachment":[{"href":"https:\/\/swaritadvisors.com\/learning\/wp-json\/wp\/v2\/media?parent=3161"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/swaritadvisors.com\/learning\/wp-json\/wp\/v2\/categories?post=3161"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/swaritadvisors.com\/learning\/wp-json\/wp\/v2\/tags?post=3161"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}