Remove Director

Under The Companies Act 2013, it’s mandatory for a private limited company to appoint at least two directors to commence its operations.

Shareholders have the authority to dismiss a director during the General Meeting, barring instances of government-appointed directors. A director may be subject to removal under several conditions, including:

  • Being disqualified as per the criteria set out in the Companies Act.
  • Not attending board meetings for more than a year.
  • Violating the terms of Section 184 of the Companies Act by engaging in prohibited transactions.
  • Being prohibited from participating due to a court or Tribunal order.
  • Conviction by a court for a criminal offence with a sentence of at least six months.
  • Non-compliance with the regulations and requirements of the Companies Act, 2013.
  • Choosing to resign voluntarily from the board.

There are three primary methods to remove a director from a company:

  • Resignation by Directors: This method involves directors resigning voluntarily from their positions.
  • Director Absence from Board Meetings: This approach is used when a director fails to attend board meetings for 12 months, triggering their removal.
  • Shareholder-initiated Removal: This method is employed when the shareholders of a company vote to remove a director from their position.

To lawfully remove a director, specific critical steps must be followed:

  • Issuance of Special Notice: According to Section 115 of the Companies Act 2013, a special notice must be issued to initiate the removal process.
  • Notice Period to Director: This special notice must be sent to the director in question at least 14 days before the resolution for their removal is voted on, ensuring they have adequate time to prepare a response.
  • Right to be Heard: The director facing removal must be allowed to present their side of the story. They should be allowed to make a written representation, which could be circulated to members or read at the meeting.
  • Restriction on Reappointment: Once removed, the director in question is not eligible for reappointment to the board.