Resignation of a Director
A Director in a company may want to resign or the Board of Directors may want to remove the Director for several reasons. The Director of a company can also resign from the Board by filing a resignation letter with the company and also intimating the ROC with the same. Here, we will take a look at the procedure that a director needs to follow in case he wants to resign from the post of Director.
Director’s notice of resignation to the company
After giving notice in writing to the Company a Director may resign from a company. The Board is required to intimate the ROC of this notice within 30 days in the form of DIR-12. If the Director chooses, he can also send a copy of the resignation letter to the ROC along with the reasons for the resignation using Form DIR-11. Here is the format for the resignation letter of a Director:
Obligation on the part of the Director who is resigning from the post
1- A director can resign from his office by submitting a notice in writing to the Board of Directors of the company. An email or a letter to the company is also a valid mode of communication.
2-A copy of the resignation can also be forwarded along with the detailed reason for the resignation to the Registrar of Companies in Form DIR11 with the prescribed fees in the Companies Rules,2014 within 30 days from the date of resignation. *Effective date of resignation: It shall be in effect from the date on which the company has received the notice of resignation or the date the director has specified any. The effective date of resignation shall be the same as the date of cessation that is entered in the form DIR12.
Liability of Director after the resignation
Once the Director has resigned and the Board has accepted his resignation, the Director is not liable for any liabilities that are incurred by the company after the date of acceptance of the resignation.
However, a Director is still liable for any offenses that have occurred during his or her as the director of the Company.
Process for Removing a Director
A Company can remove its directors before the expiry of its term, these powers are vested with the shareholders. Here we will talk about the process of removing the Directors of a Company. In case of Non-compliance with any one of these processes can make the decision void, if appealed in a court.
- Basic Prerequisite
- Issuing Notice
- Notice to Members
- Representation in writing
- Appeal to the Tribunal