Resignation of a Director in a Company

For a variety of reasons, a director of a corporation might choose to step down or the board of directors might want to fire the director. A company director may also resign from the board by submitting a letter of resignation to the company and notifying the ROC of their decision. Here, we'll look at the steps a director must take in order to resign from his or her position as director.

Director’s notice of resignation to the company

A Director may resign from a corporation by providing written notice to the corporation. The Board must send a DIR-12 to the ROC notifying them of this notice within 30 days. The Director may, if he so chooses, use Form DIR-11 to provide a copy of the resignation letter and the reasons for it to the ROC. Here is the format for the resignation letter of a Director:

Director’s Resignation Letter Format

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 the -------------- (Company name) with immediate effect or mention the resignation date. Notice of my resignation letter should 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 timely assistance to discharge my duties during my tenure as a Director of the company.

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

Thanking You,

Your’s Faithful,

Name of the Director.

Obligation on the part of the Director who is resigning from the post

1. A written resignation letter to the company's board of directors is how a director can leave their position. A letter or email to the business is likewise a legitimate form of communication.
2. Within 30 days of the resignation date, a copy of the resignation can also be sent, along with the full explanation for the resignation, to the Registrar of Companies in Form DIR11 with the required payment.
3. *Effective date of resignation: It will go into effect on the date the company receives the resignation notice or the date the director specifies, whichever comes first. The resignation's effective date must coincide with the date of cessation provided on the DIR12 form.

• Notice of resignation submitted to the company, along with an optional resignation letter
• Proof of Dispatch of the letter.
• The Director checked the box next to "Yes" on Form DIR11 if they got any acknowledgment from the Company that was required.
• Other information can also be provided as optional attachments.

Obligations for the Company

1. The Board of Directors is required to carefully review any resignation notices that are sent, and if necessary, to adopt a resolution accepting the resignation. Minutes of the Board of Directors meeting must also be prepared.
2. According to Rule 15 of the Companies, 2014, the Board of Directors must be notified in writing by the Registrar in Form DIR12 within 30 days of the resignation's receipt.
3. The resignation should be mentioned by the board of directors in the director's report to the annual general meeting and should also be updated on the company website.
4. When submitting DIR1, the company must include these papers as an attachment:

• The notice of resignation (Mandatory)
• Evidence of discontinuation (the acceptance letter or the board resolution may be attached)

Resignation Acceptance Letter by the company

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 -------------. In this regard, the Board of Directors has approved your resignation w.e.f. -----------, in the Board meeting held on ---------------.

The Board of Directors has sincerely appreciated 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 Faithful,

For --------- Company,

Director.

Liability of Director after the resignation

When a director steps down and the board accepts his resignation, the director is no longer responsible for any obligations the firm incurs after the resignation was accepted.

A Director is still accountable for any crimes that took place while they were serving as the Company's director, nonetheless.

Process for Removing a Director

The shareholders of a company have the authority to oust a director before the end of the director's term. The procedure for removing a company's directors will be discussed in this section. If an appeal to a court is made due to non-compliance with any one of these processes, the ruling will be void.

Basic Prerequisite

The Director who is to be removed must be given an opportunity before this removal process may begin. This is a fundamental need of the laws established that gives the defendant or defaulter a chance to be heard.

Issuing Notice

A notice is required to start the removal of Directors. The shareholders with a minimum voting power of 1% or those who own shares with a total value of not more than Rs. 5,00,000 paid as of the notice's date shall process it. The members of the group should all sign this particular notice. The Company should receive this special communication at least 14 days before the meeting at which the resolution will be adopted. If the notice is not sent out before three months have passed since the meeting date, it will be invalid.

Notice to Members

Regardless of whether the director is a member of the Company or not, the director must get a copy of the Notice and be given the opportunity to speak on the resolution at the meeting. At least seven days, or one week, before the scheduled meeting date, the notification must be given.

The notice may be published in any two publications, one in English and one in the local daily, if the shareholders are unable to convey it. Again, this should be done seven days before to the meeting date. The notification must be required to be placed on the firm website.

Representation in writing

The concerned director may object to this removal notification in writing. The corporation can be asked by the director to send the representation to every member. Additionally, a notice informing the members of the representation is required. The director may ask to read this representation in the event that the company is unable to accommodate all of the members.

Appeal to the Tribunal

If the organization or any aggrieved party chooses not to distribute the representation to the members or read it aloud during the meeting, they may still submit an application to the tribunal asking for the process to be thrown out. If the tribunal determines that the Director has used this privilege to obtain unwarranted publicity for defamatory ends, it may also declare the proceedings null and void. The ability to issue an order requiring the director to pay the company's application costs is likewise granted to this director.