{"id":24403,"date":"2021-01-18T15:14:17","date_gmt":"2021-01-18T09:44:17","guid":{"rendered":"https:\/\/corpbiz.io\/learning\/?p=24403"},"modified":"2021-01-18T15:14:19","modified_gmt":"2021-01-18T09:44:19","slug":"legal-obligations-related-to-the-directors-removal-in-a-company","status":"publish","type":"post","link":"https:\/\/corpbiz.io\/learning\/legal-obligations-related-to-the-directors-removal-in-a-company\/","title":{"rendered":"Legal Obligations Related To the Director\u2019s Removal in a Company"},"content":{"rendered":"\n<p class=\"has-drop-cap\">In view of the Company Act, a shareholder\nholds the right to remove the director from an organization before the\nexpiration of his\/her tenure, except appointed by the Central Government.\nRemoval needs filing of same with Ministry of Corporate Affairs (MCA), RoC\nexamines every removal with utmost care.<\/p>\n\n\n\n<p>An organization might, by ordinary resolution, remove the active director; not being a director appointed by the Tribunal u\/s 242, before the expiration of his\/her tenure after giving him an opportunity of being heard. However, if the company opts to abide by the \u201c<strong><em>principle of proportional representation<\/em><\/strong>\u201d for the <a href=\"https:\/\/corpbiz.io\/removal-of-director\"><strong>Director\u2019s removal<\/strong><\/a> then the said section shall not remain withstand in effect in that case.\u00a0 <\/p>\n\n\n\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_82_2 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title ez-toc-toggle\" style=\"cursor:pointer\">Page Contents<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Toggle Table of Content\"><span class=\"ez-toc-js-icon-con\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/span><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 eztoc-toggle-hide-by-default' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/corpbiz.io\/learning\/legal-obligations-related-to-the-directors-removal-in-a-company\/#Conditions_Cited_us_167_168_1_of_Company_Act_2013_for_Directors_removal\" >Conditions Cited u\/s 167 &amp; 168 (1) of Company\nAct, 2013 for Director\u2019s removal<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/corpbiz.io\/learning\/legal-obligations-related-to-the-directors-removal-in-a-company\/#Procedural_Instructions_related_to_the_Directors_removal\" >Procedural Instructions related to the Director\u2019s removal<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/corpbiz.io\/learning\/legal-obligations-related-to-the-directors-removal-in-a-company\/#Right_to_be_Heard\" >Right to be Heard\u00a0<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/corpbiz.io\/learning\/legal-obligations-related-to-the-directors-removal-in-a-company\/#Protections_against_Removal_for_the_concerned_director\" >Protections against Removal for\nthe concerned director&nbsp;<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/corpbiz.io\/learning\/legal-obligations-related-to-the-directors-removal-in-a-company\/#Conclusion\" >Conclusion<\/a><\/li><\/ul><\/nav><\/div>\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Conditions_Cited_us_167_168_1_of_Company_Act_2013_for_Directors_removal\"><\/span>Conditions Cited u\/s 167 &amp; 168 (1) of Company\nAct, 2013 for Director\u2019s removal <span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Following\nsection demonstrates the list of grounds for the director\u2019s removal duly\nmentioned under Section 167 and 168 (1) of Company Act, 2013. <\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Director Fails to Attend the Board Meeting For\nConsecutive Times<\/h3>\n\n\n\n<p>In view of Section 167 of the Companies Act,\n2013, if a Director fails to attend a board meeting for a year i.e., 12 months,\neven after being intimated by the company via the notice, the director needs to\nvacant his\/her position.&nbsp;<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">To remove a Director Suo-Motto by the Board&nbsp;<\/h3>\n\n\n\n<p>As per Section 169\nof the Companies Act, 2013, the company&#8217;s shareholders can remove the active\ndirector via an ordinary resolution passed in the general meeting. Let&#8217;s dive\ninto the procedural instructions related to the Director\u2019s removal from the\ncompany.&nbsp;<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Self-Submission\nby A Director<\/h3>\n\n\n\n<p>The company\u2019s\ndirector may intend to vacant his\/her position, then he\/she can do so by\npassing a resolution to the company.&nbsp; In\nview of Company Act 2013, the resignation of a director asserts that the organization\nhas some obligations to fulfill after. <\/p>\n\n\n\n<p>The first &amp; primary option is to be the organization passing a collective resolution to legalize the notice or resignation\u2019s letter and commission to file form DIR 11 enclosing the reasons for the departure, as per the norms mentioned u\/s 168(1) of <em><strong>Company Act, 2013<\/strong><\/em><sup><a href=\"https:\/\/en.wikipedia.org\/wiki\/Companies_Act_2013\"><em><strong>[1]<\/strong><\/em><\/a><\/sup>. In addition to filing DIR 11, the company needs to render the notice or resignation\u2019s letter compulsorily.<\/p>\n\n\n\n<p><strong><em>Following documents will be required for this purpose \u00a0<\/em><\/strong><\/p>\n\n\n\n<ul><li>Notice regarding the resignation filed with the Company<\/li><li>Proof of dispatch<\/li><li>Acknowledgment of form, if received.<\/li><\/ul>\n\n\n\n<p class=\"text-left\"><b>Read our article<\/b>:<mark style=\"background: #fffd03 !important;\"><a href=\"https:\/\/corpbiz.io\/learning\/roles-of-directors-and-shareholders-in-a-company\/\">A Detailed Outlook on the Roles of Directors and Shareholders in a Company<\/a><\/mark><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Procedural_Instructions_related_to_the_Directors_removal\"><\/span>Procedural Instructions related to the Director\u2019s removal <span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<table class=\"table table-bordered\"><tbody><tr><td>\n  <strong>Special Notice\n  under Section 115 of Companies Act<\/strong>\n  <\/td><td>\n  A special notice aiming to remove\n  director by the specified\n  number of members&nbsp; has to be issued at least before\n  14 days prior to the concerned meeting at which it has to moved excluding the\n  event on which the notification is served &amp; the day of the meeting. \n  <\/td><\/tr><tr><td>\n  <strong>Notice to member\n  issued by the company<\/strong>\n  <strong>to Members <\/strong>\n  <\/td><td>\n  The company shall promptly after\n  receiving the notification ought to communicate with its members by the\n  notice regarding the resolution in the way it does at the time of a general\n  resolution.\n  <\/td><\/tr><tr><td>\n  <strong>Informing the Concern\n  Director<\/strong>\n  <\/td><td>\n  Company should communicate with the\n  concern director regarding the Director\u2019s removal.\n  <\/td><\/tr><tr><td>\n  <strong>Conduct a General\n  Meeting<\/strong>\n  <\/td><td>\n  Conduct a general meeting to avail\n  permission of members in majority for the removal of director. \n  &nbsp;\n  <\/td><\/tr><tr><td>\n  <strong>Right to be Heard<\/strong>\n  <\/td><td>\n  The director will be given an\n  opportunity of being heard on the resolution at the general meeting. \n  <\/td><\/tr><tr><td>\n  <strong>Contacting ROC<\/strong>\n  <\/td><td>\n  Every change in Directorship is\n  needed of file with Registrar\n  of Company (RoC) in e-form namely DIR-12 within 30 days of passing of\n  resolution. \n  <\/td><\/tr><tr><td>\n  <strong>Appointing new\n  Director for filing Casual Vacancy&nbsp;<\/strong>\n  <\/td><td>\n  A casual vacancy shall be created\n  after the removal of the existing director, by leveraging special notice he\n  can be appointed\n  in general meeting and such director will be intimated to Registrar of\n  Company in same form DIR-12. \n  <\/td><\/tr><\/tbody><\/table>\n\n\n\n<h3 class=\"wp-block-heading\">Section 115 of Company Act, 2013<\/h3>\n\n\n\n<p>A special notice aiming to remove the existing\ndirector by the specified numbers of members of the organization has to be\nissued before 14 days prior to the concerned meeting, excluding the day on\nwhich the said notice is served &amp; the day of the meeting.<\/p>\n\n\n\n<p>A special notice needed to be given to the\norganization which shall be duly signed, either individually or collectively,\nby board members holding not less than 1% of the total voting power or holding\nshares on which a total sum of more the Rs 5 lakhs has been paid on the notice\ndate.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Intimating Members via Notice Enclosing Information\nregarding Director\u2019s Removal<\/h3>\n\n\n\n<p>After receiving the notice, the company shall\npromptly intimate its member via a notice of the resolution, in the same manner\nit does at the time of the general meeting.<\/p>\n\n\n\n<p style=\"text-align:center\"><strong>Or&nbsp;<\/strong><\/p>\n\n\n\n<p>If it is not viable for the organization to\nshare notice to the board members, it should publish it via an advertising\nplatform such as a newspaper at least 7 days of the meeting.&nbsp;<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Contacting Concern Director for Removal of Director<\/h3>\n\n\n\n<p>The company should share the concern regarding\nthe Director\u2019s&nbsp; removal with the\nconcerned director.&nbsp;<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Right_to_be_Heard\"><\/span>Right to be Heard\u00a0<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>By virtue of the legal right, the director\nwill be given a chance to be heard out at the general meeting. In such a case,\nthe director can exercise his right to share the concern with the board member\nvia a written statement.&nbsp;<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Intimation to All Shareholders<\/h3>\n\n\n\n<ul><li><strong>In case of availability of time<\/strong><\/li><\/ul>\n\n\n\n<p>In such case, the company will send notice\nalong with a representation copy to its members seven days prior <strong>to<\/strong> a board meeting<\/p>\n\n\n\n<ul><li><strong>In case of unavailability of time&nbsp;<\/strong><\/li><\/ul>\n\n\n\n<p>If notice remains inaccessible to the\ncompany&#8217;s board members, it will be published in an English newspaper in the\nstate where the company&#8217;s registered office is situated. The same notice shall\nalso need to be promulgated on the company&#8217;s website before 7 days prior to the\nmeeting.&nbsp;<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Protections_against_Removal_for_the_concerned_director\"><\/span>Protections against Removal for\nthe concerned director&nbsp;<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>The aforesaid section not only encompasses\nthe provision for Director\u2019s removal but also allow them to secure their\nposition through following arrangements: <\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Representation in Writing<\/h3>\n\n\n\n<p>The concerned director can provide a written\nstatement to the company against the removal notice. Director can ask the\ncompany to communicate the said statement with the rest of the members. <\/p>\n\n\n\n<p>The company, in response, has to share the\nstatement with the board members via a notification. If the company fails to\nundertake such a task, then the director may ask for the statement to be read\nout at the meeting. It&#8217;s the legal right of the director to be heard orally and\ncompany must treat his\/her case without prejudice.&nbsp;<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Appeal to the Tribunal<\/h3>\n\n\n\n<p>If the organization or\nany distressed individual decides to go against the legal process, they can put\nup a case before the Tribunal, demanding the nullification of the process. The\nTribunal is liable to withdraw the process if it finds that the director\nexercises this right to secure needless publicity for the defamatory matter.\nMoreover, the director is also conferred with the right to issue an order\nasking the director to reimburse the application cost bear by the\ncompany.&nbsp;<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Conclusion\"><\/span>Conclusion <span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>It is obvious from the aforesaid information that the removal of director in a company is subjected to plenty of statuary requirements. Under no circumstances, the company can remove the director without fulfilling these requirements. You can contact <a href=\"https:\/\/corpbiz.io\/\"><strong>CorpBiz&#8217;s<\/strong><\/a> expert to get best of the assistance on legal proceeding related to the Director\u2019s removal in a company.\u00a0<\/p>\n\n\n\n<p class=\"text-left\"><b>Read our article<\/b>:<mark style=\"background: #fffd03 !important;\"><a href=\"https:\/\/corpbiz.io\/learning\/procedure-for-the-removal-of-director-online\/\">Companies Act 2013 Provides Procedure for the Removal of the Director<\/a><\/mark><\/p>\n","protected":false},"excerpt":{"rendered":"<p>In view of the Company Act, a shareholder holds the right to remove the director from an organization before the expiration of his\/her tenure, except appointed by the Central Government. Removal needs filing of same with Ministry of Corporate Affairs (MCA), RoC examines every removal with utmost care. An organization might, by ordinary resolution, remove [&hellip;]<\/p>\n","protected":false},"author":22,"featured_media":24404,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[262],"tags":[1441],"acf":{"service_id":"328"},"authorName":"Pankaj Tyagi","authorImageUrl":"https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2022\/01\/MicrosoftTeams-image-42.jpg","authorDescription":"Pankaj has a diverse experience of writing research papers, blog, and articles during his college time. Earlier, he was working as a tax consultant in a financial firm, but his interest in writing drives him to pursue a career in the writing field.","postViews":5290,"readingTime":5,"_links":{"self":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/24403"}],"collection":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/users\/22"}],"replies":[{"embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/comments?post=24403"}],"version-history":[{"count":3,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/24403\/revisions"}],"predecessor-version":[{"id":24407,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/24403\/revisions\/24407"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/media\/24404"}],"wp:attachment":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/media?parent=24403"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/categories?post=24403"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/tags?post=24403"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}