Procedure for Resignation of Director & Related Compliance (With Sample Drafts)

Procedure for Resignation of Director & Related Compliance (With Sample Drafts)

The directors of a company are its eyes, ears, brain and nerves upon whose efficient functioning depend the success of the company. However due to personal or unavoidable reasons, a director may resign from his position. The provision related to Resignation of Director have been provided in Section 169 of Companies Act read with Rule 15 and 16 of Companies (Appointment and Qualification of Director) Rules,2014.

Mentioned below are the statutory requirements to be mandatorily followed by the resigning director as well as the company:

OBLIGATION ON THE PART OF DIRECTOR WHO IS RESIGNING

1. A director may resign from his office by giving a notice in writing to the company i.e. the Board of Directors of the company. E-mail communication or letter addressed to the company is a valid mode of communication

2. The director may also forward a copy of resignation alongwith detailed reason for the resignation to the Registrar in Form DIR-11 along with the fee as provided in the Companies (Registration Offices and Fees) Rules, 2014 within 30 days from the date of resignation.

(Effective date of resignation: The resignation of a director shall take effect from the date on which the notice of resignation is received by the company or the date, if any, specified by the director in the notice, whichever is later OR The effective date of resignation shall be same as the date of cessation entered in eForm DIR-12 if already filed by the company)

3. While submitting DIR-11, the director is required to attach the following documents:

• Notice of resignation filed with the company (Resignation Letter can be attached)
• Proof of dispatch
• Acknowledgement received from company, if any and is mandatory if yes selected in Form DIR-11 (Resignation acceptance Letter by the Company can be attached)
• Any other information can be provided as an optional attachment(s).

OBLIGATION ON THE PART OF THE COMPANY

1. The Board of Directors shall take note of the receipt of the notice of resignation which can be considered in the meeting of the Board of Directors. Accordingly, the resolution is passed by the Board of Directors for accepting the resignation and the minutes of the meeting of the Board of Directors shall be drafted.

2. The Board of Directors shall within 30 days from the date of receipt of notice of resignation from a director, intimate the Registrar in Form DIR-12 [Rule 15 of the Companies (Appointment and Qualification of Directors) Rules, 2014].

3. The Board of Directors shall also place the fact of resignation in the Director’s Report of subsequent annual general meeting of the company and also it must be reflected in the website of the company.

4. While filing DIR-1, the company is required to attach the following documents:

• Notice of resignation is mandatory (Resignation Letter can be attached)
• Evidence of cessation is mandatory (BOARD RESOLUTION OR RESIGNATION ACCEPTANCE LETTER can be attached)

SAMPLE DRAFTS

SAMPLE BOARD RESOLUTION

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. ….. (DIN-…) AS DIRECTOR

“RESOLVED THAT resignation of Mr…… 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. Ram, 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.”

Certified True Copy

For ABC Private Limited

(Ram)

Director

Address:

DIN:

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 to that effect.

Thanking You

Yours sincerely,

(…..)

Address:

DIN No.:

RESIGNATION ACCEPTANCE LETTER BY THE COMPANY

To, Dated:

Mr….

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

(Ram)

Director

DIN:

BRIEF SUMMARY OF THE ABOVE MENTIONED PROVISION:

Director’s Resignation {Sec 168(1)}	Effective Date of Resignation {Sec 168(2)}	Resignation or vacancy of all directors {Sec 168(3), 167(3)}
• Notice in writing to Company • Intimate ROC in DIR-11 • Company shall intimate ROC in DIR-12 • Disclosure in Director’s Report and website	• Date on which notice is receieved by company OR • Date specified by Director in the notice, whichever is later.	• The promoters shall appoint the required number of directors • In absence of promoters, the Central Govt shall appoint. • Such appointment shall be valid till the appointment of directors in general meeting