CS Divesh Goyal
PROCESS OF RESIGNATION OF DIRECTOR UNDER COMPANY ACT– 2013
Section 168, the Companies Act, 2013: Resignation of directors
Corresponding sections of the Companies Act, 1956: None as this is a newly introduced section.
DIRECTORS RESIGNATION UNDER COMPANIES ACT, 2013:-.
1. The Director intending to resign shall send notice in writing to the Company. The resignation of a director shall take effect from:
- The date on which the Notice Is Received by the company or
- The Date, If Any, Specified by The Director in the notice, whichever is later.
2. The director who has resigned shall be liable even after his resignation for the offences which occurred during his tenure.
3. The law has caste duty upon the Director Resigning, to File Form DIR- 11 (Company shall file form DIR 12) and
- Mention therein the Reason for Resigning.
- Enclose the copy of Notice sent to the Company.
- Enclose Proof Of Dispatch.
- File the said form within 30 days of resignation along with the prescribed filing fees.
There is warning note at the end of the form which states as follows:
Note: Attention is also drawn to provisions of Section 448 and 449 which provide for punishment for false statement and punishment for false evidence respectively. These sections 448 and 449 relate to punishment for committing fraud or giving false evidence and these are non-compoundable offences.
Duty of Company in case of Resignation by Director As per section 168 (1):
A director may resign from his office by giving a notice in writing to the company and the Board. The company shall on receipt of such notice;
- Take note of the same by passing a board resolution to that effect and
- As per Rule 15 of Companies (Appointment and Qualification of Directors) Rules, 2014 the company shall intimate the Registrar through Filing Of Form Dir.12 Within 30 Days From The Effective Date of Resignation on its website, if any.
- Company is also required to Place the Fact of Such Resignation in the Report of Directors laid in the immediately following general meeting by the company.
Duty of Resigning Director in case of Resignation:
A director shall also forward a Copy of His Resignation Along With Detailed Reasons for the resignation to the Registrar within 30 (Thirty) days of resignation through filing of Form DIR.11 under his Digital Signature. It means it will be mandatory for all directors to have Digital Signature under Companies Act-2013.
Effective date of Resignation:
As per section 168 (2), the resignation of a director shall take effect from the date on which the notice is received by the company or the date, if any, specified by the director in the notice, Whichever Is Later.
SECRETARIAL PRACTICE:
As discussed above E-forms to be filed in case Resignation of Director are form DIR.11 and DIR.12.
- Filing of Form DIR.11 is the responsibility of resigning director under his/her digital signature and
- Whereas Filing of Form DIR.12 is the responsibility of Company.
Where all the directors of a company resign from their offices, or vacate their offices under section 167, the promoter or, in his absence, the Central Government shall appoint the required number of directors who shall hold office till the directors are appointed by the company in general meeting.
DIR – 11:
- Enter the date of appointment of resigning director in the company.
- In case of an alternate director, enter the DIN of the director to whom the appointee is alternate and click Pre-fill button. System will automatically display the name of the director to whom the appointee is alternate.
- Enter the date of filing of resignation with the company and also effective date of resignation specified in the notice.
- The resignation of a director shall take effect from the date on which the notice is received by the company or the date, if any, specified by the director in the notice, whichever is later. And the same effective date is required to be mentioned above.
- The effective date of resignation shall be same as the date of cessation entered in eForm DIR-12 if already filed by the company.
- It is mandatory to specify the reasons for resignation from the company.
Attachments: The following attachments are mandatory:
- Notice of resignation filed with the company.
- Proof of dispatch-{Attachment section of form DIR-11, asks for proof of dispatch. Now the question is — Is there any requirement of formal dispatch through post which generates proof of dispatch? My Answer is “NO”. We can very well use scan copy of “Receiving” of resignation letter given by responsible official of the company in case of personal delivery. Further scan copy of printout of E-mail through which resignation tendered would be enough as proof of dispatch}.
- Acknowledgement received from company, if any and is mandatory if yes selected in option at serial no 6. {Point no. 6 in form DIR-11 inquires whether confirmation is received from the company w.r.t. the resignation of Director. As per my understanding if we mention “NO” in the E-form, there will be no issue in future as confirmation of resignation from company is not mandatory u/s 168.
- When a director files eForm DIR-11 for intimating about his resignation before the company files eForm DIR-12, an email will be sent to the company for filing the eForm DIR-12 and the status of the Director in the company will be changed to ‘Resigned’ against the selected designation. Once the company files the relevant eForm DIR-12, the status shall be changed as per the existing system.
We can use Board Resolution for taking note of resignation or Resignation acceptance Letter by the Company as Evidence of Cessation. Further Resignation Letter given by the Director shall act as Notice of Resignation filed with the Company. I sincerely believe that above article would be of some help for understanding.
DRAFTS
DOCUMENT FORMATS REGARDING RESIGNATION OF DIRECTOR
Please find below sample formats of relevant documents required for resignation of Director:
1. Sample Resignation Letter
Date:
To
The Board of Directors,
ABC Private Limited
Address
Sub: Resignation from the position of Director
Dear Sir/Madam,
Due to personal and unavoidable circumstances, I hereby tender my resignation from the Directorship of the Company with immediate effect. Kindly accept this letter as my resignation with immediate effect, from the post of Director of ABC Private Limited, and relieve me of my duties.
Kindly acknowledge the receipt of this resignation letter and arrange to submit the necessary forms with the office of the Registrar of Companies, NCT of Delhi and Haryana to that effect.
Thanking You
Yours sincerely,
(Mohit Chauhan)
Address:
DIN No.:
————————————
2. Resignation acceptance Letter by the Company
To, Dated:
Mr. Mohit Chauhan
Address:
Subject: Acknowledgement of Resignation
Dear Sir,
This has reference to your resignation letter dated _________. In this regard, please be informed that, the Board of Directors have approved your resignation w.e.f. __________, in the duly held Board meeting dated _______________.
The Board sincerely appreciated your association with the Company and the support which you have rendered during your tenure. We would like to wish you all the best with respect to your future.
Thanking you,
Yours Faithfully
For ABC Private Limited
(Rakesh Singh)
Director
DIN:
————————
3. Board Resolution for taking note of resignation
CERTIFIED TRUE COPY OF THE RESOLUTION PASSED AT THE MEETING OF THE BOARD OF DIRECTORS OF ABC PRIVATE LIMITED HELD ON _______________AT 03.00 P.M. AT ________________________________
RESIGNATION OF MR. MOHIT CHAUHAN AS DIRECTOR
“RESOLVED THAT resignation of Mr. Mohit Chauhan as Director, from the Board of Directors of the Company, be and is hereby accepted with effect from _________________.
FURTHER RESOLVED THAT for the purpose of giving effect to this resolution, Mr. Rakesh Singh, Director of the Company be and is hereby authorised to do all acts, deeds, matters and things as deem necessary, proper or desirable and to sign and execute all necessary documents, applications and returns along with filing of necessary E-form with the Registrar of Companies, NCT of Delhi and Haryana.”
Certified True Copy
For ABC Private Limited
(Rakesh Singh)
Director
Address:
DIN:
I am very hopeful that this write up would be of some help to understand the concepts in new Companies Act, 2013.
(Author is a Company Secretary in Practice from Delhi and can be contacted at [email protected] for suggestion, Comment and Queries )
Author Bio
can a director send his resignation letter on sunday ?
Dear sir
Me and my partner started a company before covid 19 and myself appointed as managing director,because of covid 19 business is not performing and I want to get out of the business,what is the procedure for resigning from m.d post and relieve myself from company.
Sir, new private limited company started & till now commencement of business certificate not received. Bank account also not opening. Promoters didnt give their paid up capital. Whether director can resign without paying the capital contribution.
I have being made director by my husband in a company which he want to establish. After I resigned from my old company as S/w employee in 2016.
I am not paid anything. Don’t know what is happening in company. In fact I have no say in and out of the company. I am 95% share holder rest 5% is my bhabhi. But work and decisions are made by my husband and his elder bro. Now we are separated,I need to claim maintenance but he is not ready to give any penny.How should I get ride of this false position of director of this company. Please help me.
Hi,
I resigned in June2019 & after this i also give notice period . My question is that , Can I eleigible for appraisal amount for the previous financial year April2018-march2019. Because my company is a LTD. Company ,but they are not releasing my appraisal for the previous year. Is there any legal act for holding the appraisal after Resignation.
Plz suggest.
Hello, Is there a way to resign as director from a defunct company? My friend and I set up a company in 2013 but never did anything with it at all.Now I am trying to set up another company and am being told that I cannot be director for the new company for 5 years as no tax returns were filed for the old company. Please guide?
Hi, I am position of Director ( Sales & Marketing ) in logistics pvt ltd company. I am not a share holder. They have a Three active directors and one inactive director in this company. The company was opened on 4 months back. Only one minutes of meeting passed in this period. all directors not invest fund direct into account. They spend money time to time and make account. As per the minutes, not yet provided anything. They take a decision day on day in different. As my position of director in marketing job, i found and referred some companies. They accept to service 3 companies, not provided vehicle in this company properly so they refused service right now. now i am suffering so much. Now the company going to loss for the last 4 months bzs of non service. The salary also not to given properly, ie., 17th or 20th of the day. How can i relieve this company??? and how can i claim my salary???. Kindly advice….
SIR IT WAS VERY MUCH USEFULL TO ME, AND THE RELATED FORMS, BOARDS RESOLUTIONS FORMAT AND ALL THAT WAS VERY USEFULL .
if director not filling the dir 11 with in time specified
and company have filed dir 12 within time specified then what will be the procedure.
I have resigned for my directorship, but not giving acknowledgement and not processing what to do now sir? he is doing some cheque bounce
I am one of the promoters of a startup.
We are 3 partners, One of that agreed to invest 15 lakhs for 20% equity. He shares have been transferred but the money is not given to us.
Due to some fraudulent activity going on in company I want to just quit and leave. But as the other 2 don’t want that.
My questions are
1. What is the labilities I am bound with?
2. We have not paid the tax & GST for this financial year but it was not my sole work, will I be responsible for this after resignation from board.
3. Can I ask for clean slate from any past decision taken by company for my safety so that after leaving this company I am not dragged into any issues further.
I want to resign Mr. A as Director from my company. And he does not have a DSC. Therefore can I file form 12 on behalf of the company, without Mr. A filing form 11 for resignation. Can I say that the resignation came to me in writing ?
I am one of the Director out of 2 Directors of a Pvt. Ltd. Co. commenced in 2016. But no work done in the company , not even bank account opened and There are no financial liabilities on the company. And we are only two directors in company no other member in board not even any employee. Every month we are filling GST return as per Suggested by CA.
I want to come out of the company but the other director is not co-operating in either surrender that company nor accepting my resignation. And my CA is saying until other director will accept your resignation you can’t get out of it. What could be the best way to get out of this.
Dear Sir, I have resigned from Board of one company , signed the forms 11 & 12 , But i realized that for the past 10 months the company also didnot submit / file in ROC about our resignation .
Question 1 : Whether our resignation is valid ?
Question 2 : Is it possible to fight back with company to restore the board incl.us ?
Question 3 : Whether the company is eleigible or Can submbit the 11 & 12 now ( after 10 months )
I was working in a Private Limited Company The Mass Way A U/o of Swaraj Impex Pvt Limited Can I opened my own partnership firm with the name The Mass Way. Please answer
I am appointed as a director on 1-03-2017. The director who authorised me to appoint given his resignation letter with effect from 24-02-2017. may i authorise his resignation for filing DIR-12 by passing a board resolution on 01-03-2017.
I was removed as director as if I resigned by other members without my knowledge, the company is still active and operational. How does one challenge the matter?
I was removed as director of the company without been informed. How does one challenge the matter.
I am working with a company in hariyana As director since feb 2014. at the start other director agree me to work without any investment coz that time i were not able to invest.he agree to give me 40% share. since then he didint show my any balance sheet,service tax return, company annual return. from july 2016 he give me 40% share of company.He is associated with more then one firms already.Now i Join one more company as 49% directorship at other location. He have problem that he don’t agree to associated with other company as director. he say i can work for his company only.now what i do. should i do resign for other company or is he have right to remove from company. my digital signature is also with him plz reply
Mail your resignation letter to the Company email id.
CAN ANY ONE HAVE AUTHORITY LETTER IN FAVOUR OF PRACTITIONER BY A FOREIGNER TO FILE DIR-11 INSTEAD OF HIMSELF
I am a non-resident and non-shareholding director of a company. The 100% shareholding director has accepted my resignation by email. I sent a physical resignation letter to the company’s registered office which was returned undelivered. How do I disassociate myself from the company?
Resigning director DSC role check with roc required or not kindly clarify my quary
We are two directors in a private limited company and we both want to resign. No other shareholder is ready and interested in becoming a director. It is a non-commercial company of a residential society of 12 members / shareholders. The residential building of 12 apartments is owned by the company. The company has no dues to anyone. All ROC compliances are regular. Please advise. Thanks.
– See more at: https://taxguru.in/company-law/procedure-resignation-director-company-compliance.html#sthash.ITCmxJwL.dpuf
thanks.. helping article…
I joined a pvt. ltd company as a director for 6 months and didn’t like the operating style of the organisation hence resigned vide an email.Will the mail be taken as resignation or not?Now i am being asked to sign the balance sheets of previous 3 years should i be doing it?
Please suggest
Thanks
Piyush
C.A./company implicicated as us as one of director in thier company involved in other business activities.Co.is active &duly filing all the returns
We were implicated with forged signatures & digital signature since long back 9 yrs.
Come to know just10 days ago.If co.retires our name to what extent our liability stands.
Kindly suggest how to move ahead.
Sir our company is two directorship PVT LTD company in which I’m 49% share holder but I’m valauntary resigned from my directorship last 60 days back but company has not given me any acknowledgedment or any resolution to file the form 11 and company also not file the form12 but majority 51% share holder given the acknowledgement on my xerox resignation letter puted the date so my request is kindly give suggestion for further action.
I have a question if due to some disputes if other directors don’t give acceptance for resignation what are the options available for a director to resign.
Please help.
Regards,
Anand Goyal
GOOD
dear sir my frind is a director of a pvt company from 3 year . only two director in a company. but one of director is not given any money to another director. and also taken a money for work. after 3 year he is saying i had got big loss in my company. and not agree for any settlement. please suggest me what to do.
What about intimation to RBI by nbfcs about resignation of director ? which guideline speaks about the same ?
DEAR SIR,
LET ME KNOW THE PROCESS WHEN A PVT. LTD COMPANY HAS ONLY TWO DIRECTORS AND ONE WANTS RESIGN AND OTHER DIRECTOR IS NOT IN TALKING TERM AND COMPANY HAS NOT STARTED BUSINESS,
i HAVE ONE CLIENT LIKE THIS AND THEIR DIGITAL SIGNATURE ALSO EXPIRED.
sir iam a director of a pvt ltd company, all 3 directors are forcing to give resignation by not giving any kind of settlement ,i have worked for the company for 15 years without any kind of remuneration and they are refusing to pay the investment interest by giving half ,by giving reason that the company is under loss ,kindly suggest me what should i do , or there is any kind of court that i can fight for justice,
with regards
kumar
Thank you very much sir. This detailed and very well drafted article is definetly of great help.
Rinkle
IF THERE ARE ONLY TWO DIRECTORS IN A PRIVATE LIMITED COMPANY AND ONE WANTS TO RESIGN THAN WHAT CONSEQUENCES. PLEASE SUGGEST
THANKS
im join to director board in april 1 , 2015.but im decided to resign …
this pvt ltd co.
i dont konw other director approved / sign to my resign letter ..so what is procedure of this situvation….
i want to resign from the company but board of directors are accepting my resigation without sowing any reason
If DIR-11 AND DIR-12 is not filed then following are the consequence:
According to section 172 of the companies act 2013 if company contravenes of the provision of this chapter and for which no specific punishment is provided therein, the company and every officer of the company who is in default shall be punishable with fine which shall not be less than fifty thousand rupees but which may extend to five lakh rupees.
IF DIR-11 and DIR-12 NOT FILE THEN FOLLOWING ARE THE CONSEQUENCE
In terms of section 172, the company and every officer of the company who is in
default shall be punishable with fine which shall not be less than fifty thousand
rupees but which may extend to five lakh rupees.
Sir,
If the resigning director files DIR-11 but the company will not file DIR-12 with ROC then whether ROC take on record the resignation or wait for the company to file DIR-12.
I feel both DIR-11 & 12 needs to be filed only then ROC can act on the filings.
This is not fair as resigning director continue to be on board of the company as per ROC records if company do not file DIR-12,for no fault of his.
Our company is incoperated before two months..Now one director would like to resign..Is there any legal issue for his resgnation as the company is only two month old.
what penalty impose to director for non filling of DIR-11 within 30 days of resignation
THERE ARE TWO DIRECTORS IN A COMPANY ONE IS RESIGNING WHAT HAPPENS
Sir,
There are two directors who wants to resign and other shareholders not coming forward to take directorship. Only goverment liablities are there of not our tenur.
Please advise
Thanks
Rajender Goel
We are two directors in a private limited and wants to resighn.
None of the other shareholders interested in becoming directors as the company is neither doing any buisness nor having any assests but very old goverment dues are there when we too were not directors.
please advise.
Thanks
Rajender Goel
Thanks for the information. However, if certain directors of the company claim to have resigned without intimation to the board…how the same is updated. This is in regard to old companies and during 2004-2006 periods.
There is an instance, where the MD has refused to accept a resignation for want of board ratification through appropriate resolutions, but the concerned director has apparently filed his and few director’s resignation without informing the company and board.
How this has to be resolved?
Very good and concise article.
Will help in reducing court cases against resigned directors, for non-filing annual returns.
Keep Smiling …. Hemant Agarwal
READ ARTICLES ON: http://hemantagarwal21.blogspot.in/?view=sidebar
Thanks very much for your detailed inputs on procedure to be followed under the new Act.It is very helpful for small Pvt ltd companies to follow.
We hope to get more and more such helping contributions from you from time to time.
Thanks again & best regards & keep it up.
Manjunath
Thanks for this crisp note with templates for the resignation and related documents.
Vasudevan