Removal And Addition Of Directors / Partner

Overview of Removal And Addition Of Directors / Partner

According to the requirements of the law for rotation of directors or otherwise, a company may appoint a director as per his convenience by filing Dir-12. A director may also resign from the company as he wishes to give notice to the company in writing and to file Form Dir-11 and Dir-12.

The change in directorship of a company is possible any time as and when needed. The change includes addition and removal both. There can be voluntary change or due to the demand in change. The demand arises in case of need of an expert in the board or due to death or resignation of an existing director. In any such event, to exhibit the change a company must follow the rules specified under the Companies Act.

Addition of director

A director can be added in a company only in a general meeting with the approval of the shareholders. Hence a change in the directorship of a company is possible by adding a director in an annual general meeting or call an extraordinary general meeting. But sometimes it is not feasible to wait for an AGM neither is it possible to call an extraordinary general meeting. In these circumstances, a company can add an additional director in a board meeting and later on it can regularize such director in the upcoming AGM.

• Prerequisites to appoint a Director

1. Digital Signature
2. The director must have a DIN
3. Consent to act as a director in form DIR-2

• Process of an addition of Director In General Meeting or Extra Ordinary General Meeting:

1. Send notice to directors to call the board meeting
2. Pass a board resolution to call General Meeting
3. Send Notice to all the shareholders
4. Pass resolution in AGM or EGM
5. File form DIR-12 with MCA

• Appointment of additional director

1. Send notice to directors to call the board meeting
2. Pass resolution for the appointment
3. File form DIR-12 with MCA
4. At the time of AGM, pass a resolution to regularize the additional director
5. File form DIR-12 with MCA

Removal of director

• Removal of director – A director can voluntarily resign from the company or a company can remove the director with a reasonable cause. But in either of the cases, the total number of directors must not be less than 2. If the company receives the letter of resignation then the company shall take a record of it by passing a board resolution. The director is deemed to have resigned from the date on which the company receives the notice from the director or the date specified if any by the director in the notice, whichever is later. The company has to file a form with MCA within 30 days of the resignation.
• Removal of Director by shareholder – A company can remove its director before the expiry of the period offer by passing a shareholders resolution. The company must send the notice to all the members. Also, the company has to intimate the director about the removal. Such a director will have an opportunity of being heard. He may send his statement to the company and company may circulate it to the members. If the time period is short then such statement may be read in the general meeting. If members deem fit, they may remove the director by passing an ordinary resolution. The company must file the form for removal of a director with MCA within 30 days from the removal.
• Director and shares held by directors – It is assumed that every director must hold shares of the company and so the new director is not added. But the fact is – it is not mandatory for every director to hold shares. Change in directorship is possible adding a without offering the shares. Secondly, it is also assumed that if the director resigns from the company then he/she needs to surrender the shares. But it is not mandatory; such director can remain a shareholder in a company after leaving directorship.

Eligibility criteria for Removal And Addition Of Directors / Partner in India

To be eligible for the Removal or addition of directors/ partners of your Company, you should make sure of the following:

1. The new partners and directors are qualified in case you are adding
2. There is a legitimate reason for the Removal of directors and partners

Documents required to obtain an Removal And Addition Of Directors / Partner

The following information & documents are required for intimation to ROC about such change

1. Name & DIN of the new Director of the Company
2. E-mail id & Mobile Number of the new Director of the Company
3. Name of Director who is to remove from the directorship of the Company

• Documents

1. Board Resolution for the appointment of Director
2. Appointment letter
3. Consent Letter
4. Board Resolution for Removal of Director of the Company
5. Resignation Letter
6. Acceptance of resignation letter
7. ID & Address proof of Director
8. Two Photographs of the Director

FAQs About Removal And Addition Of Directors / Partner?

Disclaimer: The content provided here is for informational purposes only. Your access to or use of the Site or Content does not create an attorney-client relationship. The information provided on this website is not legal or professional advice and should not be relied upon for such purposes or as a substitute for legal advice from a licensed attorney in your state. For more information and tailored information, please feel free to contact us.