Overview

The removal of a director is a legally governed process that must be carried out in accordance with the Companies Act, 2013 and the company's internal policies. Whether in a private limited company or a public company, the process requires compliance with statutory guidelines to ensure a smooth transition and avoid legal disputes.

At Calzone, we help businesses legally and efficiently remove directors while ensuring full compliance with MCA regulations.

When Can a Director Be Removed?

A company may need to remove a director due to various reasons, including:

• Breach of fiduciary duties or misconduct
• Non-compliance with statutory obligations
• Shareholder dissatisfaction
• Long-term absenteeism from board meetings
• Voluntary resignation
• Court or Tribunal orders

Calzone ensures that the removal process follows legal guidelines while minimizing operational disruptions.

Who is a Director Under the Companies Act, 2013?

A director is an individual appointed to manage and oversee a company's affairs. As the decision-makers of a company, directors play a vital role in ensuring compliance, governance, and strategic growth.

Types of Directors in a Company

• Executive Directors - Actively manage day-to-day operations (CEO, CFO, COO).
• Non-Executive Directors - Provide strategic oversight but are not involved in daily management.
• Independent Directors - Ensure transparency and protect shareholder interests, with no financial stake in the company.

If a director fails to fulfill their duties, they can be removed through a structured legal process.

Ways to Remove a Director from a Company

There are two main ways to remove a director from a company:

In cases of fraud, misconduct, or legal non-compliance, the National Company Law Tribunal (NCLT) may intervene and order compulsory removal.

At Calzone, we manage the entire process to ensure full legal compliance while protecting your company's interests.

Step-by-Step Process for Removal of a Director

• Step 1: Issue a Special Notice
  • A special notice under Section 115 of the Companies Act, 2013 is issued to initiate the removal process.
  • The notice is sent to the concerned director and all shareholders.
• Step 2: Allow the Director to Respond
  • The director has the right to submit a written representation defending their position.
  • The representation must be shared with shareholders before voting.
• Step 3: Conduct a General Meeting
  • The company holds an Extraordinary General Meeting (EGM) or Annual General Meeting (AGM) to vote on the removal.
  • Shareholders pass an ordinary resolution to finalize the removal.
• Step 4: File Form DIR-12 with ROC
  • After approval, the company must file Form DIR-12 with the Registrar of Companies (ROC).
  • Attach supporting documents, including the special resolution and director's resignation letter (if applicable).
• Step 5: Update Company Records
  • The company updates internal records, regulatory filings, and official registers to reflect the change.
  • If required, the company may appoint a new director to fill the vacancy.

Calzone handles the entire process, from documentation to ROC filings, ensuring compliance at every step.

Checklist for Director Removal

• Issue a special notice (Section 115, Companies Act 2013)
• Allow the director to submit a response
• Conduct a General Meeting and vote on removal
• Pass a resolution for director removal
• File Form DIR-12 with ROC
• Update company records and notify relevant stakeholders

Special Cases of Director Removal

• 1. Absence from Board Meetings for 12 Months (Section 167, Companies Act 2013)
  • If a director fails to attend board meetings for 12 consecutive months, their position is automatically vacated.
  • The company must file Form DIR-12 with the ROC to officially remove the director.
• 2. Suo-Moto Removal by the Board
  • If the Board identifies misconduct or failure to perform duties, it can call an EGM to remove the director.
  • A resolution is passed, and Form DIR-12 is filed with the ROC.
• 3. Removal by National Company Law Tribunal (NCLT)
  • If a director is involved in fraud, mismanagement, or oppression of shareholders, the NCLT can order removal.
  • A formal application is submitted by shareholders, regulatory authorities, or the company.
  • After hearings, the NCLT issues an order for removal, which must be followed immediately.

Form DIR-12 - Filing Requirements for Director Removal

Filing Form DIR-12 is mandatory under the Companies Act, 2013 to officially remove a director from MCA records.

Information Required in Form DIR-12:

• Company Name & Corporate Identification Number (CIN)
• Director's Name & Director Identification Number (DIN)
• Date of Removal & Reason for Removal
• Type of Meeting & Resolution Details
• Attachments: Board Resolution, Notice of Meeting, Consent/Resignation Letter

Penalties for Late Filing of Form DIR-12

Failure to file Form DIR-12 may result in a penalty of ₹50,000 for the company and ₹500 per day for continuing non-compliance.

At Calzone, we ensure timely and accurate Form DIR-12 filings to prevent penalties and legal disputes.

Why Choose Calzone for Director Removal?

• Complete Legal Compliance - We ensure 100% adherence to the Companies Act, 2013.
• Hassle-Free Documentation - We prepare and file Form DIR-12, special notices, and resolutions.
• Expert Guidance & Support - From Board Meetings to ROC filings, we handle everything.
• Cost-Effective & Transparent Pricing - No hidden charges, just reliable service.