What is Director Removal?
Director removal is the formal legal process of terminating a director’s appointment from the board of a company. This can be initiated by shareholders, the board, or by the director’s own resignation, and must comply with the Companies Act and all procedural safeguards.
Legal Grounds for Director Removal
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Incurring disqualifications under the Companies Act (e.g., conviction, bankruptcy, or court order)
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Absence from board meetings for 12 consecutive months
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Breach of company policies or regulatory non-compliance
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Conflict of interest or entering into prohibited contracts
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Non-performance or failure to fulfill director duties
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Resignation submitted by the director
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Removal by order of court, tribunal, or government authority
Step-by-Step Director Removal Process
1. Special Notice by Shareholders
A special notice must be given by members holding at least 1% of total voting power or shares with a paid-up value of at least ₹5 lakh. The notice must be sent to the company at least 14 days before the meeting where the removal will be considered.
2. Notice to the Director
The company must promptly send a copy of the special notice to the concerned director. The director has the right to make a written representation and to be heard at the meeting.
3. Board Meeting
The board convenes to consider the special notice and to call a General Meeting (AGM or EGM) for shareholders to vote on the removal.
4. General Meeting & Shareholder Vote
At least 21 days’ notice must be given to all members for the General Meeting. The resolution for removal is put to vote; the director is given an opportunity to present their case before the vote. If the majority of shareholders vote in favor, the resolution is passed.
5. Filing with Registrar of Companies (ROC)
After the resolution, the company must file Form DIR-12 (and DIR-11 if applicable) with the ROC, along with the board and shareholder resolutions. The director’s name is then removed from the official records.
6. Appointment of New Director (if required)
The vacancy may be filled at the same meeting, provided special notice has been given for the appointment.
Required Documents for Director Removal
| Document Type | Details/Description |
|---|---|
| Special Notice | Signed by eligible members proposing removal |
| Board Resolution | Copy of the resolution to convene General Meeting |
| Notice to Director | Proof of communication to the concerned director |
| Written Representation (if any) | Director’s written statement or defense |
| Shareholder Resolution (AGM/EGM) | Ordinary resolution passed for removal |
| Form DIR-12 | Filing with ROC for removal of director |
| Form DIR-11 (if applicable) | Director’s own filing of resignation |
| Updated Register of Directors | Reflecting removal and new appointment (if any) |
| Other Supporting Documents | AGM/EGM minutes, indemnity/affidavit, if required |
Director Removal Compliance Checklist
| Step/Requirement | Description |
|---|---|
| Special Notice | Ensure proper notice as per Section 115 of the Companies Act |
| Director’s Right to be Heard | Allow director to respond and present their case |
| Board & Shareholder Resolutions | Pass and record all necessary resolutions |
| Proper Meeting Notice | Give 21 days’ clear notice for General Meeting |
| Timely ROC Filing | File DIR-12 (and DIR-11 if applicable) promptly after the meeting |
| Register Update | Update company registers and records |
| Appointment of Replacement | If required, appoint a new director at the same meeting |
Frequently Asked Questions (FAQs)
Who can initiate the removal of a director?
Shareholders holding at least 1% voting power or shares worth ₹5 lakh, or the board, can initiate removal by special notice.
Can a director be removed without their consent?
Yes, provided due process is followed, including notice, right to be heard, and shareholder approval.
What is the timeline for director removal?
The process generally takes 3–4 weeks, depending on notice periods and meeting schedules.
What forms are required for ROC filing?
Form DIR-12 is mandatory for all removals; DIR-11 is filed by the director if resigning.
Can a removed director be reappointed?
A director removed by shareholders cannot be reappointed by the board.
What if the director was appointed by proportional representation or tribunal?
Such directors cannot be removed by ordinary shareholder resolution.
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