Often comes the need to remove a director from the company. But the removal of directors has some procedures to be followed.
- A director can be removed by passing an ordinary resolution at a general meeting
- A special notice of a resolution is required
- Notice has to be sent to all members
- A general meeting has to be called
- Before 21 days of the meeting, a written notice about the special notice and the proposing of ordinary resolution has to be issued
- On receipt of notice of resolution, company has to send a copy of the same to the director to be removed
- The director shall be given an opportunity to be heard at the general meeting. If the director gives any written representation against his removal, it shall be forwarded to all the members.
- If the representation could not be sent, the same can be read out at the general meeting.
- Hold general meeting and pass the proposed resolution by means of an ordinary resolution
- Company has to file Form DIR-12 with the ROC within 30 days of removal
- In case of listed company, the detail of removal of director is to be sent to the stock exchange where it is listed.
- A general public notice can be issued to inform the public of the removal of director
Documents required to be submitted to the ROC:
- CTC of special notice received from shareholders
- POD of special notice to director concerned
- Notice of EGM to other shareholders
- CTC of ordinary resolution passed at EGM
Time taken for complete removal of director takes 1-2 months.
The cost to remove director varies from vendor to vendor. Approx cost INR 3000-4000.