Remove a Director Online
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A Private company can remove a director if he meets any of the incompetence specified under the Companies Act, 2013, absents himself/herself from board adherence over 12 months. It enters into agreements or arrangements against the provisions of section 184. However, it gets excluded by order of a court or Tribunal or is convicted by a court of any crime and sentenced to imprisonment for not less than six months.
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How to Remove a Director in a Company Online?
We help you in the process of removing the director in three easy steps with TaxMyTax.
Understanding
We help you to understand the concept of removing a director and solve your queries.
Submission of Documents
Our professional team prepare the documents and upload the forms after verifying the same.
Removal
We help you in the entire process and remove director name from MCA.
General Overview
Conditions for the Removal of Director from the Company
There could be three possible cases for the removal of directors from the company. They are as follows:
- In the case, the director didn’t attend three consecutive board meetings;
- Removal of director suo-moto by the board;
- When the director himself/herself submits the resignation.
We will discuss all the three conditions one by one as under:-
1. Director didn’t attend three consecutive meeting
2. Removal of director suo-moto by the board
As per Section 169 of the Companies Act 2013, shareholders have the authority to remove the director 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 should be a Board Meeting by giving seven days notice to all the directors. Furthermore, an exceptional notice will go to the directors informing them about the removal of the director.
- Next, a resolution for holding an extraordinary general meeting will be passed along with the resolution for the removal of the director subject to the approval of the shareholders on the day when the board meeting will be held.
- Again there would be a general meeting by providing 21 days 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.
- But before the resolution is actually passed, the director will be provided with an opportunity for being heard.
- After the resolution is passed, the same procedure needs to be followed, and the Form DIR-11 and DIR-12 must be filed along with the same attachments of the Board Resolution, Ordinary Resolution.
- After the form has been filed, the name of the director will be removed from the Ministry of Corporate Affairs website.
- the Board resolution accepting the resignation has been passed in a Board meeting , Form DIR-11 needs to be filed by the outgoing director along with the Board Resolution, Proof of delivery of the resignation letter and copy of the resignation letter.
- The director is accountable for the filing of DIR-11, Form DIR-12 is the responsibility of the company which has to be filed with the Registrar of Companies (RoC) along with the Registration letter and the Board Resolution.
- Once all the forms are filed, the name of the director will be removed from the master data of the company on the MCA
Consequences of not filing the form DIR-12
In 30 days of date of the resignation, if the company fails to or doesn’t file the ‘form DIR-12’, the below mentioned penalty will be applied.
- One-time payment of actual Government fees until 15 days;
- If it exceeds 15 days, twice the actual government fee need to be paid by the company
- A penalty of 4 times the actual government fee is applicable if the period exceeds 30 days to 60 days
- In case it exceeds 180 days, 10 times the actual government fee is applicable
- If the company fails to file the form DIR -12 within 300 days from the date of passing the resolution, then it has to pay 12 times the actual government fee and will be booked for the compounding offense as well.
Documents needed for Removal of Director
- Photograph: Passport size photo of the Director to be resignated
- PAN Card: Self-attested PAN card of the Director to be resignated
- Proof of Residency: Aadhar Card/ Voter ID/ Passport/ Driving License
- Identity proof : Passport/Election card/Driving License/Aadhar card
- Digital Signature Certificate: DSC of the ongoing Director and Director to be eliminated/removed
- Mobile number and Personal & official email id of the Director
- Notice of resignation filed with the company
- Proof of dispatch
- Acknowledgment of form (DIR-11), if received.
Note:- It is mandatory to apostle all the documents apostilled if the Director is a non-resident of India.
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Frequently Asked Questions
There may be no alternative option left for the Company than to seek the removal of Director by consulting to the Board and with a majority of shareholders under (AOA) of the Company.
The member who proposes the dismissal should provide a ‘Special Notice’ of a resolution to remove a director at least 28 days before the meeting at which the director may be excluded.
If no fixed period has been provided for retirement in Articles of Association of a private company, a director appointed is entitled to continue till he is removed in accordance with provisions of section 169. There are certain types of Directors who cannot be removed. The following categories of directors cannot be removed by a company under section 169 of the Companies Act, 2013:— -a director appointed by the Tribunal under section 242; -a director coming within the purview of directors appointed according to the principle of proportional representation under section 163 of the Act -a nominee director of a public financial institution which is by its charter empowered to nominate a person as a director or to remove him notwithstanding any power contained in any other Act; -While the shareholders have no power, apart from that given in the statute or the Articles, to intervene in the management of the company’s affairs, this section 169 of the Act is designed to enable them to control the Directors by their removal.
Yes, a Permanent Director can be removed by a company. A company has power under section 169 to remove a permanent director even if Articles of association put restrictions on removal of the permanent director. A permanent director appointed under the Articles of Association of a Company to hold office for life can also be removed from office.
Under the Companies Act, 2013, in a private company, a shareholder can appoint a director, so ideally only they hold the authority to remove directors. However, in proprietary companies, the removal of director can be commenced by a majority of directors if the constitution permits it.
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