Removal of Director

As the directors of a company are ultimately responsible to the shareholders, the shareholders do hold the right to remove any director (excepting a director appointed by the Tribunal u/s 242) from the Board of Directors or the company, even before the expiry of the period of his/her office, if they anytime find something in contradiction to the duties of directors given in the section 166 of the Companies Act, 2013. For this purpose, the shareholders just require to call for a general meeting and pass only an ordinary resolution to do so. However, the director to be removed must be given a proper notice containing the reasons for removal, and sufficient time for explanation and discussion. Again, any such removal of director must be supported by relevant and proper documentation, prescribed processes, and timely intimation to the concerned ROC. The provisions and procedure for removal of a director from company are given in the section 169 and the Chapter-7 of the Indian Companies Act of 2013.

Procedure for Removal of Director Under Companies Act- 2013

In general, the procedure for removal of director under companies act-2013 involves the following main processes:

• The company or its Board of Directors must have cogent reasons for removing the impugned director. The director proposed to be removed, should also be informed about this for inviting any justification with evidence or explanation from him.
• A special notice is to be given to the company and its shareholders, and also to the director to be removed, as per the provisions given in section 115 of the Companies Act of 2013, at least 14 days before the proposed date of general meeting, excluding the day of dispatch of the notice as well as the proposed date of the meeting.
• Conducting the meeting, and passing an ordinary resolution for removing the specified director by the company. The director to be removed is also to be informed about such a resolution taken by the company.
• The company is then required to file Form DIR-12 with the concerned ROC, along with a copy of the resolution and other relevant documents, within Thirty days.
• The company is also needed to make necessary changesor entries in the Register of Directors maintained as per the provisions given in the section 170 of the Companies Act, 2013.
• In case, the concerned company is a listed public limited company, it also requires to inform all those stock exchanges on which the securities of it are listed, about the removal of the specified director from the company.