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 csdiveshgoyal@gmail.com for suggestion, Comment and Queries )

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39 responses to “Procedure for Resignation of Director of Company & Compliance”

  1. Manoj says:

    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

  2. Director says:

    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.

  3. Sam says:

    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?

  4. Sam says:

    I was removed as director of the company without been informed. How does one challenge the matter.

  5. deep says:

    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

  6. Karan Khurana says:

    Mail your resignation letter to the Company email id.

  7. VED PRAKASH says:

    CAN ANY ONE HAVE AUTHORITY LETTER IN FAVOUR OF PRACTITIONER BY A FOREIGNER TO FILE DIR-11 INSTEAD OF HIMSELF

  8. RV says:

    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?

  9. NARESH says:

    Resigning director DSC role check with roc required or not kindly clarify my quary

  10. Parag Mashruwala says:

    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: http://taxguru.in/company-law/procedure-resignation-director-company-compliance.html#sthash.ITCmxJwL.dpuf

  11. Amol says:

    thanks.. helping article…

  12. Piyush says:

    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

  13. Nikhil jain says:

    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.

  14. MOHD ZUABIR says:

    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.

  15. Anand Goyal says:

    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

  16. Rahul kumar says:

    GOOD

  17. nitesh says:

    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.

  18. Dharan says:

    What about intimation to RBI by nbfcs about resignation of director ? which guideline speaks about the same ?

  19. CA BIJAY says:

    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.

  20. kumar says:

    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

  21. Rinkle Jain says:

    Thank you very much sir. This detailed and very well drafted article is definetly of great help.

    Rinkle

  22. UDIT AGARWAL says:

    IF THERE ARE ONLY TWO DIRECTORS IN A PRIVATE LIMITED COMPANY AND ONE WANTS TO RESIGN THAN WHAT CONSEQUENCES. PLEASE SUGGEST

    THANKS

  23. siyavudheen says:

    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….

  24. r c kajaria says:

    i want to resign from the company but board of directors are accepting my resigation without sowing any reason

  25. RAHUL KUMAR says:

    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.

  26. RAHUL KUMAR says:

    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.

  27. Venu says:

    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.

  28. Rahul says:

    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.

  29. ABHI says:

    what penalty impose to director for non filling of DIR-11 within 30 days of resignation

  30. GOPI says:

    THERE ARE TWO DIRECTORS IN A COMPANY ONE IS RESIGNING WHAT HAPPENS

  31. Rajender Goel says:

    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

  32. Rajender Goel says:

    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

  33. Bnath says:

    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?

  34. Hemant Agarwal says:

    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

  35. B S MANJUNATH says:

    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

  36. Vasuydevan says:

    Thanks for this crisp note with templates for the resignation and related documents.
    Vasudevan

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