Tech Munshi

Remove a Director

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Why Remove a Director?

Removing a director from a company’s board can be necessary for various reasons, such as non-compliance with duties, misconduct, prolonged absence, conflict of interest, or a breach of trust. It’s crucial to follow the legal procedures outlined in the Companies Act, 2013, to ensure a smooth and compliant removal process.

Legal Grounds for Director Removal

  1. Non-attendance: Director has not attended any board meetings for 12 months.
  2. Disqualification: Director becomes disqualified under Section 164 of the Companies Act, 2013.
  3. Misconduct or Fraud: Director is involved in fraudulent activities or gross misconduct.
  4. Conflict of Interest: Director engages in activities that conflict with the company’s interests.
  5. Board Resolution: Board decides to remove a director due to specific reasons aligned with company policy.

How to Remove a Director in India?

Step 1: Check Articles of Association (AoA)

  • Review the company’s Articles of Association to understand the procedure and any specific requirements for removing a director.

Step 2: Board Meeting

  • Convene a board meeting to discuss and decide on the removal of the director.
  • Pass a board resolution approving the removal and setting the date for an extraordinary general meeting (EGM), if required.

Step 3: Issue Special Notice

  • Issue a special notice to all members of the company at least 14 days before the EGM.
  • The special notice should include the intention to remove the director and the reasons for removal.

Step 4: Send Notice to the Director

  • Send a copy of the special notice to the concerned director.
  • Allow the director to present their case or make a representation in writing.

Step 5: Hold Extraordinary General Meeting (EGM)

  • Convene the EGM on the scheduled date.
  • Discuss the resolution for removing the director.
  • Pass the resolution by a simple majority vote of the shareholders present at the meeting.

Step 6: File Necessary Forms with ROC

  • File Form DIR-12 with the Registrar of Companies (ROC) within 30 days of passing the resolution.
  • Attach the necessary documents, including the resolution and notice of removal.

Documents Required for Director Removal

  1. Board Resolution Copy: Resolution passed by the board approving the removal of the director.
  2. Special Notice Copy: Notice issued to the members and the director.
  3. EGM Resolution Copy: Resolution passed by shareholders at the EGM.
  4. Form DIR-12: Form filed with the ROC, along with necessary attachments.
  5. Representation Letter (if any): Written representation by the director being removed.

Consequences of Non-compliance

  • Legal Penalties: Non-compliance with the legal procedure can lead to penalties and legal action against the company.
  • Reinstatement: The removed director may challenge the removal process if not done in compliance with the law, leading to potential reinstatement.
  • Reputation Damage: Improper removal can damage the company’s reputation and lead to distrust among stakeholders.

Why Choose Us?

At Tech Munshi, we provide comprehensive support to ensure the smooth and legally compliant removal of a director. Here’s why you should choose us:

  • Expert Guidance: Our team of legal experts guides you through each step of the removal process.
  • Document Preparation: Assistance in preparing and verifying all necessary documents.
  • Compliance Assurance: Ensure compliance with all legal requirements to avoid penalties.
  • Timely Processing: Efficient handling to ensure the process is completed promptly.
  • Ongoing Support: Continuous support for any queries or issues related to the removal process.