Removal of Director : Complete Guide

1. Governing Law
   • The process is governed primarily by Section 169 of the Companies Act, 2013, along with applicable provisions of the Articles of Association (AoA) of the company.
2. Authority to Remove
   • Only the shareholders in a general meeting have the power to remove a director before the expiry of their term, except in cases of casual vacancies.
3. Special Notice Requirement
   • A special notice of at least 14 days must be given to the company about the intention to remove the director.
   • The director must be informed of the proposal and allowed an opportunity to make representations.
4. Director’s Right to Represent
   • The director being removed has the right to submit a written explanation or make a representation to the shareholders at the general meeting.
   • The company is required to circulate this representation to all members, if received in time.
5. Passing the Resolution
   • Removal requires a special resolution in the general meeting, unless otherwise specified in the AoA.
   • A simple majority of shareholders voting is generally sufficient unless the AoA states stricter requirements.
6. Filing with MCA
   • After removal, the company must file Form DIR-12 with the Ministry of Corporate Affairs (MCA) within 30 days of the resolution.
7. Effect on Contracts and Liabilities
   • Removal does not release the director from liabilities incurred while in office, unless otherwise discharged by law.
   • Proper documentation protects the company from future disputes or claims.
8. Casual Vacancy vs Regular Removal
   • If the director resigns or is removed, the board can appoint a replacement director to fill the casual vacancy, subject to shareholder approval if required.
9. Compliance with AoA
   • Ensure the process aligns with the Articles of Association and any shareholders’ agreement, as deviations may lead to legal challenges.
10. Impact on Board Composition
    • Consider the minimum and maximum number of directors prescribed under the Companies Act to maintain statutory compliance.

1. Resignation by Director
   • The director voluntarily submits a written resignation letter to the Board.
   • The Board takes note and passes a resolution accepting the resignation.
   • The company files Form DIR-12 with the ROC within 30 days.
   • The resigning director should submit Form DIR-11 to the ROC to limit liabilities.
   • This is the simplest and most common method of exit.
2. Removal by Shareholders under Section 169
   • Shareholders can remove a director (except those appointed by Tribunals) by passing an ordinary resolution in a general meeting.
   • A special notice of removal must be given to the company at least 14 days before the meeting by shareholders holding minimum prescribed shares.
   • The company must inform the director and send them a copy of the notice.
   • The director can provide written representation and speak at the meeting.
   • The resolution is put to vote and passed by a majority.
   • Independent directors reappointed for a second term require a special resolution for removal.
   • Post-removal, the company files DIR-12 with required attachments within 30 days.
3. Vacation of Office (Section 167)
   A director vacates office in cases like:
   • Absence from board meetings for 12 months continuously without leave.
   • Becoming disqualified under Section 164.
   • Company being wound up.
   • Director being convicted by a court with a sentence of at least six months.
In these cases, the director ceases to hold office automatically, and the company files DIR-12.

• Written resignation letter (if resignation).
• Shareholder special notice for removal (if removal by shareholders).
• Board resolution accepting resignation or calling general meeting.
• Ordinary/special resolution passed at the general meeting.
• Director’s representation (if any).
• Forms DIR-11 and DIR-12 for ROC filings.
• MGT-14 if special resolution is passed (for public companies).

• Director removal must follow natural justice, including notice and hearing rights.
• Improper removal can lead to legal challenges.
• Deleted directors remain liable for acts before removal.
• Failure to file forms on time leads to penalties and non-compliance records.
• Seek professional help for drafting notices, resolutions, and ROC filings.

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