Resignation Of Company Director
For a variety of reasons, a company’s Director may wish to resign or the Board of Directors may wish to dismiss the Director. A business’s Director can also resign from the Board of Directors by filing a resignation letter with the company and notifying the ROC. We’ll look at the steps a director must take to resign from his or her position as a director in this article.
Resignation notification to the firm from a director
A Director may resign from a corporation after giving written notice to the firm. The Board must notify the ROC of this notification in the form of DIR-12 within 30 days. If the Director so desires, he may also use Form DIR-11 to transmit a copy of the resignation letter to the ROC, along with the reasons for the resignation. The following is the format for a Director’s resignation letter:
Format Of a Director's Resignation Letter
Date, Month, Year
The Chairman / Secretary
Company Name Private Limited
City, State, Pin Code
Subject: Resignation from the Company’s Board of Directors
I now tender my resignation as Director of the ————————————————————————————————————————————————————————————————————————————————————————————————— My resignation letter should be sent to the Registrar of Companies, and the Board of Directors should be notified at the next regularly scheduled board meeting.
I would like to express my gratitude to the whole Board of Directors for providing me with this opportunity and prompt help in carrying out my obligations as a Director of the firm.
For my reference and record, I request that the Board of Directors send me with an acceptance of my resignation as well as a copy of the E-form DIR-12 submitted with the Registrar of Companies to that effect.
Thanking you ,
Obligation from the Resigning Director
- A director can resign from his position by giving written notice to the company’s Board of Directors. A valid form of communication with the firm is by email or letter.
- Within 30 days after the date of resignation, a copy of the resignation, along with the specific explanation for the resignation, can be sent to the Registrar of Companies in Form DIR11, along with the specified fees under the Companies Rules,2014.
- The Director must additionally include the following papers with DIR-11:
- The Company receives notice of your resignation (resignation letter can also be attached)
- Proof of the letter’s dispatch.
- If the Director has chosen Yes in Form DIR11 for any acknowledgment received from the Company that is necessary.
- Optional attachments can be used to offer more information.
- The Board of Directors must evaluate the notice of resignation that has been received and, as a result, the Board of Directors must approve a resolution accepting the resignation, as well as prepare the minutes of the meeting of the Board of Directors.
- Within 30 days of receiving the resignation, the Registrar shall be notified in Form DIR12 (according to Rule 15 of the Companies, 2014) and the Board of Directors should be notified.
- The resignation shall be mentioned by the board of directors in the annual general meeting’s Director’s report, as well as on the Company’s website.
When submitting DIR1, the corporation must provide the following documents:
- The resignation letter (Mandatory)
- Evidence of abstinence (The board resolution or the acceptance letter can be attached)
*Effective date of resignation: It will take effect on the day the company receives the notice of resignation, or the date indicated by the director. The effective date of resignation is the same as the date of cessation listed on form DIR12.
Company Acceptance Letter for Resignation
Date, Month, Year
——— (Name of the Director who has resigned)
Subject: Acceptance of Resignation
Regarding your resignation letter dated ———————————————————————————————————————————- In this respect, during the Board meeting on —————, the Board of Directors authorised your resignation with effect from —————-.
Your involvement with the firm and the support you provided throughout your term were much appreciated by the Board of Directors. We wish you the best of luck in all of your future efforts.
For ——— Company,
Director's Liability After Resignation
Once a Director resigns and the Board accepts his resignation, the Director is no longer responsible for any obligations incurred by the business after the date of the resignation acceptance.
A Director, on the other hand, is nonetheless responsible for any violations committed while serving as a director of the Company.
Removing a Director: A Step-by-Step Guide
The shareholders have the ability to dismiss a company’s directors before the expiration of their term. The procedure of dismissing a company’s directors will be discussed here. If the judgement is challenged in court, non-compliance with any of these steps can render the ruling null and invalid.
This process of removing the Director cannot begin without giving the Director who is to be removed an opportunity to be heard. This is one of the most basic requirements of the laws, which gives the defendant or defaulter a chance to be heard.
A notification must be sent to begin the process of removing Directors. This notice should be processed by shareholders with a minimum voting power of 1% or by someone who owns shares with a total value of not more than Rs. 5,00,000 on the date of the notice. This is a specific notice that all members are required to sign. This special letter must be sent to the Company at least 14 days prior to the meeting at which the resolution will be adopted. If the notice isn’t sent out three months before the meeting, it won’t be legitimate.
Whether or whether the director is a member of the Company, a copy of the Notice must be provided to the director who will be heard on the resolution at the meeting. The notice should be served at least seven days, or one week, before the meeting. If the shareholders are unable to deliver the notice, it can be published in one English newspaper and one vernacular newspaper. The notice must be posted on the company’s website at least seven days before the meeting date.
In writing, representation
The concerned director has the right to appeal the removal notice. The director has the option of requesting that the firm transmit the representation to all members. A notification should also be sent to the members informing them of the representation. If the firm is unable to reach all of its members, the director may request that this representation be read aloud.
The Tribunal will hear your case.
If the organisation or any aggrieved individual decides not to submit the representation to the members or read it out in the meeting, an application to the tribunal can be filed to have the procedure nullified. If the tribunal decides that the Director is abusing this privilege for defamatory reasons, the procedure might be terminated. This director is also given the authority to issue an order requiring the director to pay the company’s application costs.