Removal of Director

Removal of Director from a Company

Directors handle a company’s management and day-to-day operations, while shareholders are the actual owners. Sometimes, directors may be removed due to poor performance, misconduct, or other reasons. Alternatively, a director may decide to resign on their own.

Removing a director is a serious decision and must follow the legal rules set by the Companies Act 2013 (or other relevant laws). Whether done through a board resolution, ordinary resolution, or a court order, the process must be fair, transparent, and always in the company’s best interest.

Key Reasons for Removing a Director

🔍 Poor performance or failure to fulfill responsibilities

❌ Misconduct or violation of company policies

🏢 Change in management or company restructuring

📜 Legal disqualification under company law



    Penalties for Delayed Submission of Form DIR-12

    If a company fails to file Form DIR-12 within the required 30-day period after a director’s resignation, penalties increase based on how long the delay lasts:

    ⏳ 30 to 60 Days Delay

    • Penalty: 2x the standard government fees

    🕒 60 to 90 Days Delay

    • Penalty: 4x the government fees

    🚨 Beyond 90 Days Delay

    • Penalty: 10x the government fees

    ⚠️ Exceeding 180 Days Delay

    • Penalty: 12x the government fees

    The company could also face legal action for compounding offences.

    Essential Requirements for Director Removal

    Issuance of Special Notice
    • A special notice, as per Section 115, must be issued to begin the removal process.
    • The special notice should be sent to the concerned director at least 14 days before the meeting where the removal will be discussed.
    • This gives the director enough time to prepare their response.
    • The director should have the opportunity to explain their side of the story.
    • They can submit a written representation, which can either be shared with members or read out during the meeting.
    • After removal, the director cannot be reappointed to the board of the same company.