A Private limited company is one that is most preferred. Incorporation of private limited company attracts Angel investors, Venture capitalists and other budgetary organizations. Every private limited company has a minimum of 2 directors. A minimum of two directors is required for pvt ltd company formation. However, there is a procedure that needs to be followed to remove the directors as well.
This blog will give you an insight into the procedure for removal of a director from a private limited company. We will look at three possible cases during the removal of a director from a private limited company
WHEN THE DIRECTOR GIVES HIS RESIGNATION
- A board meeting is held by the company and 7 days of clear notice is given
- There will be a discussion made among the board members concerning the acceptance of the resignation
- The board will then pass a resolution accepting the resignation of the director
- The outgoing director has to then file the DIR-11 form along with the board of resolution, proof of delivery of the resignation letter and copy of the resignation letter once the resolution has been passed.
- Filing the DIR-11 is the responsibility of the director while filing the DIR-12 is the responsibility of the company. The DIR-12 needs to be filed with the Registrar of Companies along with the resignation letter and board resolution
- The name of the director will be removed from the master data of the company on the Ministry of Corporate Affairs once the filing of all the firm is done.
TO REMOVE A DIRECTOR SUO-MOTO BY THE BOARD
- Seven days prior notice is given before the board meeting and a special notice is given to the directors informing about the removal of the director
- On the day of the board meeting, a resolution to hold a general meeting will be passed along with the resolution of removal of the director with the approval of the shareholders.
- A clear notice of 21 days will be given before holding a general meeting. In this meeting, the members will be asked to vote regarding the matter. If the majority of the members are in favour of the decision, then a resolution will be passed.
- The director will be allowed to be heard before passing of the resolution
- Once the resolution is passed, the same procedure of filing DIR 11 and DIR 12 will be followed along with the same attachments of the Board and an ordinary resolution
- Once the forms are filed, the name of the director will be removed from the Ministry of Corporate Affairs website
WHEN THE DIRECTOR DOES NOT ATTEND THREE BOARD MEETINGS IN A ROW
According to section 167 of the Companies Act, 2013, if a director ceases to attend the board of meeting for 12 months, starting from the day on which he was absent even after prior notice for meetings were sent, it will be deemed that the director has vacated his office and a form DIR 12 will be filed on his name and his name will be struck off from the Ministry of Corporate Affairs.
The removal of a director involves the filing of two forms which are DIR 11 and DIR 12. This blog takes you through the steps involved in the removal of a director in three different scenarios where there is a slight difference in each of the scenarios.
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