Removal of Director Under Companies Act 2013

According to the Companies Act 2013, removing a director is possible; however, a director can question his removal. The shareholder of the company can partake in the removal of the director, from the Company before the expiry of his tenure, except appointment by Central Government removal which requires the filing of same with MCA, ROC scrutinises every removal with care. Therefore, it is suggested to hire a Company secretary service to take care of the situation.

Procedure for the Removal of the Director

Two cases arise here:

1. The Company itself removes the director
2. The Director does not attend three Board meetings in a row.

In case the company removes the Director:

• A prior notice of seven days will be served to all the Directors informing about the removal of Directors.
• A resolution is passed to have a general meeting, and then for the removal of the director, is a subject to the approval of the shareholders on the day of the meeting.
• The Board members of the company will hold a Board meeting by providing clear notice of seven days. This notice should be issued within 21 days by the company which is excluding both the days on which the notice was sent and received.
• In the board meeting, the Board members will discuss and then decide whether to remove the 'Director'.
• Before passing the final resolution, the director who is being removed by the shareholders will be allowed to speak on his/her removal can present anything in favour of themselves.
• After the resolution is passed, the shareholders must file Form DIR-11 and Form DIR-12, along with the attachments of the Board Resolution, and an ordinary resolution.
• In the end, the name of the concerned director has to be finally withdrawn and removed from the master data of the company of the MCA (Ministry of Corporate Affairs) website.

In case the Director does not attend three Board meetings in a row:

• According to Section 167 of the Companies Act, 2013, if a director does not attend three consecutive Board meeting for 12 months then it is considered as a director has vacant the office. This 12 month means the day on which he was absent at the first board meeting even if he/she got the prior notice of all the meetings.
• The absence from the office of the director will be considered as if he/she has left the office. Hence, FORM DIR-2 is filed then.
• Subsequently to this, the name of that concerned director will be removed from the MCA website.

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