What is the procedure for removal of a Director?

The shareholders and the Board can arrange for a meeting by giving a 7-day notice to all the existing directors. In the meeting, the decision for the removal of the Director can be taken unanimously by sending a notice to the concerned Director.

How long does it take in the Removal of Director process?

Usually, an organization can proceed with a unanimously accepted Notice from the Board Meeting to complete the removal process within 14 days.

How can a director be removed from his position?

The office of a director may be vacated by statute, death, either under a provision in the AOA of the company or by a Shareholders Agreement.

Can you remove a company director without their consent?

No right is vested to terminate a director from his office under the AOA, while the shareholders of the company can remove the director from his office by an ordinary resolution provided that the strict procedure under the section 168 of the Companies Act 2013 is followed.

How many Directors an entity can employ in India?

The number of Directors differentiated on the basis of classification of the organization: • For Public Company: Minimum 3 Directors • For Private Company: Minimum 2 Directors • For One-Person Company: 1 Director

Removal of Director Under Companies Act 2013

By Online Legal India Published On 18 Dec 2020 Updated On 11 Jun 2021 Category Company Registration

According to the Companies Act 2013, removing a director is possible; however, a director can question his removal. The shareholder of the company can partake in the removal of the director, from the Company before the expiry of his tenure, except appointment by Central Government removal which requires the filing of same with MCA, ROC scrutinises every removal with care. Therefore, it is suggested to hire a Company secretary service to take care of the situation.

Procedure for the Removal of the Director

Two cases arise here:

The Company itself removes the director
The Director does not attend three Board meetings in a row.

In case the company removes the Director:

A prior notice of seven days will be served to all the Directors informing about the removal of Directors.
A resolution is passed to have a general meeting, and then for the removal of the director, is a subject to the approval of the shareholders on the day of the meeting.
The Board members of the company will hold a Board meeting by providing clear notice of seven days. This notice should be issued within 21 days by the company which is excluding both the days on which the notice was sent and received.
In the board meeting, the Board members will discuss and then decide whether to remove the 'Director'.
Before passing the final resolution, the director who is being removed by the shareholders will be allowed to speak on his/her removal can present anything in favour of themselves.
After the resolution is passed, the shareholders must file Form DIR-11 and Form DIR-12, along with the attachments of the Board Resolution, and an ordinary resolution.
In the end, the name of the concerned director has to be finally withdrawn and removed from the master data of the company of the MCA (Ministry of Corporate Affairs) website.

In case the Director does not attend three Board meetings in a row:

According to Section 167 of the Companies Act, 2013, if a director does not attend three consecutive Board meeting for 12 months then it is considered as a director has vacant the office. This 12 month means the day on which he was absent at the first board meeting even if he/she got the prior notice of all the meetings.
The absence from the office of the director will be considered as if he/she has left the office. Hence, FORM DIR-2 is filed then.
Subsequently to this, the name of that concerned director will be removed from the MCA website.

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