prpri Removal of Director Under Companies Act, 2013 with Notice & Resolution formats Removal of Director Under Companies Act, 2013 with Notice & Resolution formats

In a company, the Board of Directors are the person who is responsible for the proper management and functioning of day to day affairs in an efficient manner.  The power of appointment of directors rests with the members and in few cases directors can also appoint directors in the company. However, removal of any director can takes place only with the approval of members. Let us discuss the provisions & procedure of removal of director.

1. Applicable Provisions under Companies Act, 2013

Section 169 read with Section 115 of The Companies Act 2013 and Rule 23 of the Companies (Management and Administration) Rules, 2014 dealt with the provisions of removal of director. 

2. Procedure

a. Member shall send Special Notice to the company not earlier than 3 months but at least 14 days (clear days) before the date of the meeting to remove a director or appoint someone in place of removing director.

b. On receipt of such notice, the company shall immediately send a copy thereof to the concerned director.

c. The director may give representation in response to the special notice sent by the members and the company shall give details of such representation to the members alongwith the notice of general meeting. If the representation could not be send, the director may read out the representation at the meeting.

d. Notice of board meeting along with draft resolution(s) to be passed in the board meeting shall be send to the directors at least 7 days before the date of board meeting or may be called at shorter notice.

e. Convene the board meeting and pass the following resolutions:

    • Removal of director subject to the approval of shareholders in general meeting by way of ordinary resolution;
    • Fix day, date, time and venue for calling general meeting and;
    • Approve the notice of general meeting

f. The company shall give its members notice of general meeting at least 7 days (clear days) before the date of meeting. If it is not practicable, publish in English and vernacular newspaper, both having wide circulation in the State where the registered office of the Company is situated and such notice shall also be posted on the website, if any, of the Company.

g. Receive shorter notice consent if the notice is not sent atleast 21 days before the date of general meeting in the manner as specified under section 101 of the Companies Act, 2013.

h. Convene the general meeting and pass Ordinary Resolution by the members for removal of director.

i. The director shall vacate the office.

j. New director will be appointed at the same meeting if the appointment was intended in the special notice. If no new director is appointed by the members, board has the right to appoint the director by casual vacancy under section 162(4) of the Companies Act, 2013.

k. Form MGT-14 shall be filed to ROC within 30 Days from the date of general meeting, wherever required.

l. Form DIR-12 shall be filed to ROC within 30 Days from the date of general meeting.

m. Make necessary entries in register of directors, key managerial personnel and their shareholding.

3. FAQs

a. Who cannot be removed by members of the company?

  • A Director appointed by the Tribunal under section 242
  • An Independent Director re-appointed for second term under sub-section (10) of section 149 shall be removed by the company only by passing a special resolution
  • In case the company has availed the option given under section 163 to appoint directors according to the principle of proportional representation

b. Whether opportunity of being heard is mandatorily required to be given?

Yes

c. Whether MGT-14 is required to be filed?

Ordinary Resolution passed for removal of director is not necessarily required to be filed to the Registrar. However, Board Resolution passed for removal of KMP is mandatory file to the Registrar in accordance with Rule 8 of Companies (Meetings of Board and Its Power), 2014.

Hence, if a director being Managing Director or Whole-Time Director is going to be removed, Form MGT-14 shall be filed. However, this requirement is not applicable in case of private company.

d. Whether disclosure in Boards’ Report is required to be given?

Yes

e. What will be the tenure of appointed director in place of removing director?

Unexpired tenure of removed director

f. Who can give special notice?

Members holding not less than 1% of total voting power or holding shares on which an aggregate sum of not less than 5 lakh rupees has been paid up on the date of the notice whether individually or collectively.

g. Whether the Form DIR-12 filed for removal of director will be on STP Mode or Approval Mode?

Approval Mode

4. Drafts of required documents for removal of director

Special Notice

Date:

To

The Board of Directors,

M/ s…………………………Limited

Address:

Subject: Issue of Special Notice and Requisition under the applicable provisions of the Companies Act, 2013 and the Rules framed thereunder for convening an Extraordinary General Meeting of the shareholders of …………….. Limited

Dear Sir,

1. We, the undersigned shareholder(s) of M/s ……… Limited, holding in aggregate as on the date hereof ……… Equity Shares having face value of Rs. …../- (Rupees …… only) each representing ………% shareholding of the Company’s total voting power and have/has paid in aggregate the sum of Rs…………., (Rupees …… only) against the shares of the company.

2. Pursuant to Section 100, 115 and 169 and other applicable provisions of the Companies Act, 2013 and ruled framed thereunder, we submit this requisition to you for convening an Extraordinary General Meeting of the shareholders of ……………… Limited, in the manner prescribed under applicable law, to pass the following resolution(s):

Item No. 1: REMOVAL OF MR. ……… AS DIRECTOR OF THE COMPANY

To pass the following resolution as an Ordinary Resolution:

“RESOLVED THAT pursuant to the provisions of Section 169 and other applicable provisions of the Companies Act, 2013 and the Rules framed thereunder, Mr./Ms. …………………… (DIN: ……………..) be and is hereby removed from the office of Director of the Company with effect from the date of this meeting.”

In this connection following issues are called for attention of the members of company:

*Explanation and Grounds for Removal*

3. Please treat this notice as Special Notice under Section 169(2), read with Section 115 and other applicable provisions of the Companies Act, 2013 and the Rules framed thereunder for the aforesaid purpose.

Yours Faithfully

…………………….

(Member)

Folio No.

Intimation letter

Date:

To

Name of the Director

Director

(Name of the Company)

Address:

Subject: Intimation with respect to receipt of Special Notice for your removal from directorship

Dear Sir,

A special notice under section 115 of the companies act, 2013 (copy enclosed) has been received by the Company from its member(s), required a resolution to be proposed at a duly convened Extra-Ordinary General Meeting of the Company for your removal pursuant to the provisions of section 169 of the Companies Act, 2013.

In case you intend to make representations against the resolution for your removal, I request you to send the representations so as to reach us by (date) so that it may be circulated to the members of the Company. In the event, the representation is not received by the aforesaid date, an opportunity of being heard will be provided and the representation may be read out at the Extra-Ordinary General Meeting.

Kindly acknowledge the receipt of letter for our reference and record.

Yours faithfully, 

For & On behalf of Board of Directors,

(Name of the Company)

(Name of the Director)

Director

DIN: 

Resolutions to be passed by Board of Directors

CERTIFIED TRUE COPY OF THE RESOLUTION PASSED AT THE MEETING OF THE BOARD OF DIRECTORS OF THE (NAME OF THE COMPANY) HELD ON (DAY AND DATE) AT (TIME) AT THE REGISTERED OFFICE OF THE COMPANY SITUATED AT (ADDRESS OF REGISTERED OFFICE).

REMOVAL OF MR./MS…………………. AS DIRECTOR OF THE COMPANY

“RESOLVED THAT in accordance with the provisions of section 100, 115 and 169 and other applicable provisions of the Companies Act, 2013, the special notice received from (Name of the Member), a member of the company, who holds … % of total voting power of the company, proposing the removal of Ms./Mr. ……………, Director under section 169 of the Companies Act, 2013, be included as an item of special business in the agenda for the Extra-ordinary General Meeting which be held on (Day), (Date) at (Time), at (Venue) on the requisition of shareholders.

RESOLVED FURTHER THAT the consent of the Board be and is hereby given, subject to the approval of the members, for the removal of Ms./Mr. …………… as a Director of the company with effect from the ensuing Extra-ordinary General Meeting.

RESOLVED FURTHER THAT Mr./Ms. ……………….., (Designation) be and is hereby authorised to issue the notice of the said general meeting to the members of the company as per the draft placed before the Board and to do all such acts, deeds and things as may be necessary to give effect to the foregoing resolution.”

For & on behalf of Board of Directors

(Name of the Company) 

Name of the Director

Director

DIN: 

Address:

Date:

Place:

Notice of EGM

Dear Members,

Notice is hereby given that an Extraordinary General Meeting (EGM) of …………………. Limited, on the requisition of member(s) of the company, which holds ………….% of the voting power of the Company, will be held on day, date, at time at venue of the meeting to transact the following business:

SPECIAL BUSINESS:

Item No. 1

REMOVAL OF MR./MS…………………. AS A DIRECTOR

To consider and if thought fit, to pass the following resolution as an Ordinary Resolution:

“RESOLVED THAT pursuant to the provisions of Section 169 and other applicable provisions of the Companies Act, 2013 and the Rules framed thereunder, Mr./Ms……….. (DIN: …………………) be and is hereby removed from the office of Director of the Company with effect from the date of this meeting.”

For & on behalf of Board of Directors

(Name of the Company)

 

Name of the Director

Director

DIN: 

Address:

Date:

Place:

NOTES:

1. The Board of Directors at its meeting held on ………………., have approved the convening of the EGM and the issue of the Notice of the said meeting. The relative Explanatory Statement pursuant to Section 102 of the Companies Act, 2013 (“the Act”), in respect of the business as set out in the Notice is annexed hereto.

2. A MEMBER ENTITLED TO ATTEND AND VOTE AT THE MEETING IS ENTITLED TO APPOINT A PROXY TO ATTEND AND VOTE ON HIS/HER BEHALF. SUCH PROXY NEED NOT BE A MEMBER OF THE COMPANY. A person can act as a proxy on behalf of members (not exceeding 50) and holding in the aggregate not more than 10% of the total share capital of the Company carrying voting rights. A Member holding more than 10% of the total share capital of the Company carrying voting rights may appoint a single person as a proxy and such person shall not act as a proxy for any other person or Member.

3. The instrument of Proxy, in order to be effective should be duly completed and deposited at the Registered Office of the Company not less than 48 hours before the time for holding the Meeting.

4. Corporate Members intending to send their authorised representatives to attend the Meeting are requested to send to the Company, a certified copy of the Board Resolution authorising their representative to attend and vote on their behalf at the Meeting

5. Members are requested to bring their attendance slip along with their copy of the Notice to the Meeting.

6. The Special Notice dated …………. received from members of the company and the representation from Mr. …………. as mentioned in the Explanatory Statement, are available for inspection by the Members at the Registered Office of the Company between 10:00 a.m. and 6:00 p.m. on any working day of the Company up to the date of the Meeting. The aforesaid documents shall also be available for inspection at the venue of the Meeting.

7. A route map showing directions to reach the venue of the Meeting forms part of this Notice.

For & on behalf of Board of Directors

(Name of the Company)

Name of the Director

Director

DIN:

Address:

Date:

Place:

EXPLANATORY STATEMENT

(Pursuant to Section 102 of the Companies Act, 2013)

……………………, the Requisitionist(s), has provided the following information in relation to the Special Business proposed to be conducted at the Extraordinary General Meeting of the Company:

*Name & shareholding of the Requisitionist(s), alongwith grounds of removal*

Consequently, the Board of Directors of the Company by its resolution dated …………….. has resolved to propose the removal of Mr./Ms ……………. as Director of (Name of Company).

None of the Directors or Key Managerial Personnel of the Company or their respective relatives is concerned or interested in the resolution set out in the Notice

For & on behalf of Board of Directors

(Name of the Company)

Name of the Director

Director

DIN:

Address:

Date:

Place:

Enclosures: Attendance Slip, Proxy Form and Route Map

Author Bio

Qualification: CS
Company: N/A
Location: New Delhi, New Delhi, IN
Member Since: 20 Jan 2020 | Total Posts: 1

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