A company’s director can be removed in several ways
A company’s shareholders might wonder if they can remove a director against his or her will.
It is true that a director can be removed from a company by its shareholders, except in the following situations:
- It is not the Central Government that appoints a director who is proposed for dismissal.
- Companies Act, 2013 prohibits the Tribunal from appointing directors.
It is not as simple as it seems to remove a director from a company. The Registrar of Companies will scrutinize every document twice or thrice before deciding whether or not to remove a director.
According to Sec 169 of the Companies Act of 2013, shareholders can remove a director after giving him/her a fair opportunity to be heard.
Removing a director by suo moto:
Company directors can be dismissed suo moto by issuing a special notice in accordance with Section 169 of the Companies Act, 2013.
How to remove a director from a company
In order for a director’s data to be removed from the Ministry of Corporate Affairs (MCA), a particular procedure must be followed.
Step 1: issue a special notice under Section 115 of the Companies Act, 2013
Step 2: According to Section 115 of the Companies Act of 2013, special notice must be published at least 14 days before the meeting, except for the day the notice is served.
Members of the company are notified As with a general meeting, the company should ensure that notice is sent to all shareholders, just as they would for a general meeting.
Step3: The proposal to remove the proposed director is notified
Following the company’s notification to shareholders, the third step is to inform the proposed director that he or she will be removed from the board.
Step 4: Call a General Meeting for the removal of the director
It is vital that at least 90% of shareholders approve the expulsion of the proposed director in a general meeting and move forward with the removal process.how to remove a director
Step 5: Right to be heard
Whenever shareholders vote to dismiss a director, that director must be given the opportunity to be heard before being removed from the company’s management board.
Step 6: Using ROC to fill out Form DIR-12
As soon as a shareholder meeting is called, the Registrar of Companies (ROC) must be notified by submitting form DIR-12 within 30 days of the meeting’s conclusion.
Attached to DIR-12 are the following documents:
- Meeting of the Board of Directors
- CTC of Ordinary Resolutions was adopted by the General Meeting.
- Special Notices will be removed from the director’s file.
- An explanation of the general meeting notice
- The director in question was notified.
Conclusion
According to Section 115 of the Companies Act, 2013, shareholders can eliminate a director at a General Meeting by giving him special notice. Before the company fills the position and takes other necessary steps, the removing director is given a fair chance to be heard.
Read More:-
- Director Removal – Overview
- Appointment of Additional Director
- The Importance of the Director in Company Law
