Resignation from the post of Director in a company requires following a specific procedure, including submitting a resignation letter to the company and notifying the Registrar of Companies. The process involves notice, documentation, and acceptance.

In this section, we will outline the step-by-step process that a Director should follow when resigning from their position.

Resignation Process for Directors:
When a director wishes to resign from their role, it is essential to follow the correct procedure. Here’s a breakdown of the steps involved:

1. Director’s Notice of Resignation to the Company:
The director should provide a written notice of resignation to the company, either through a letter or email. This communication should be addressed to the Chairman or Secretary of the company, stating the intention to resign from the position of Director.

2. Intimating the Registrar of Companies (ROC):
Within 30 days of submitting the resignation notice to the company, the Board of Directors is required to intimate the Registrar of Companies (ROC) using Form DIR-12. Additionally, the director may choose to send a copy of the resignation letter, along with reasons for the resignation, to the ROC using Form DIR-11.

Here’s a sample format for a Director’s Resignation Letter:

[Date, Month, Year]

To,

The Chairman / Secretary
Company Name Private Limited
City, State, Pin Code

Subject: Resignation from the Office of Director of the Company

Dear Sir/Madam,

I hereby tender my resignation from the office of the Director of [Company Name] with immediate effect [or specify the resignation date]. I request the notice of my resignation letter to be submitted to the Registrar of Companies, and the Board of Directors should be informed in the next board meeting as conducted.

I sincerely thank all the Board of Directors for giving me this opportunity and for the timely assistance provided to discharge my duties during my tenure as a Director of the company.

I kindly request the Board of Directors to provide me with an acknowledgment of the resignation and a copy of the E-form DIR-12 filed with the Registrar of Companies for my reference and record.

Thanking You,

Yours Faithfully,

[Name of the Director]

3. Obligations for the Director Resigning:
The director who is resigning must fulfill certain obligations, including:

– Submitting a written notice of resignation to the Board of Directors.
– Optionally, forwarding a copy of the resignation letter, along with the detailed reasons, to the Registrar of Companies using Form DIR-11 and paying the prescribed fees within 30 days of the resignation date.
– The effective date of resignation will be the same as the date of cessation entered in Form DIR-12.

Along with Form DIR-11, the director is also required to attach the following documents:

– Notice of resignation filed with the company (resignation letter can also be attached).
– Proof of dispatch of the letter.
– Acknowledgment received from the company (if applicable).

4. Obligations for the Company:
Upon receiving the notice of resignation, the Board of Directors should consider the resignation and pass a resolution accepting it. The minutes of the Board of Directors’ meeting should be drafted accordingly.

The Registrar of Companies must be informed of the resignation using Form DIR-12 within 30 days from the date of resignation, as per Rule 15 of the Companies Act, 2014.

Furthermore, the resignation should be mentioned in the Director’s report of the annual general meeting, and it should also be reflected on the company’s website.

When filing DIR-1, the company is required to attach the following documents:

– Notice of resignation (mandatory)
– Evidence of cessation (board resolution or acceptance letter)

5. Resignation Acceptance Letter by the Company:
Upon accepting the director’s resignation, the company should issue an acknowledgment letter. Here’s

an example of a resignation acceptance letter:

[Date, Month, Year]

To,

[Name of the Director who has resigned]
[Address]

Subject: Acknowledgement of Resignation

Dear Sir,

With reference to your resignation letter dated [resignation date], the Board of Directors has approved your resignation with effect from [resignation date], in the Board meeting held on [meeting date].

The Board of Directors sincerely appreciates your association with the company and the support you offered during your tenure. We wish you all the best in your future endeavors.

Thanking you,

Yours Faithfully,

For [Company Name],

[Director]

Liability of Director after Resignation:
Once the director’s resignation is accepted by the Board, they are generally not liable for any liabilities incurred by the company after the acceptance of their resignation. However, directors remain responsible for any offenses committed during their tenure as directors.

Process for Removing a Director:
In some cases, the Board of Directors or shareholders may need to remove a director from their position. Here’s an overview of the process:

1. Basic Prerequisite:
Before initiating the removal process, the director must be provided with an opportunity to be heard. This ensures compliance with legal requirements and fairness.

2. Issuing Notice:
The process of removing a director begins with issuing a notice. Shareholders holding a minimum voting power of 1% or individuals with shares on which an aggregate sum of not more than Rs. 5,00,000 is paid can initiate this process. The special notice, signed by all the members, should be delivered to the company at least 14 days before the meeting where the resolution will be passed. The notice cannot be issued more than three months before the meeting date.

3. Notice to Members:
The director who is subject to removal must be provided with a copy of the notice. The director, whether a member or not, should be given an opportunity to be heard on the resolution during the meeting. The notice should be served at least seven days before the meeting date.

If the shareholders are unable to deliver the notice to the director, it can be published in two newspapers, one in English and one in the vernacular language. Additionally, the notice must be posted on the company’s website at least seven days before the meeting.

4. Representation in Writing:
The director who is being removed has the right to make a representation against the removal notice. The director can request the company to send the representation to all the members, and the members should be notified of its existence. If the company fails to deliver the representation to all the members, the director may request the representation to be read out during the meeting.

5. Appeal to the Tribunal:
If the company or any aggrieved person fails to send out the representation to the members or read it out during the meeting, an application can be made to the tribunal to nullify the removal process. The tribunal has the authority to annul the process if it finds that the director used their right for unnecessary publicity or defaming purposes. The tribunal may also order the director to cover the costs incurred by the company in the application.

If you need any assistance to remove directors or If you would like to proceed with remove directors from your company our team of expert will help you to remove directors in a simplified process. We hope this information provides you with a clear understanding of the process involved when a director wants to resign or be removed from a company’s Board of Directors.