Resignation of Director

Hello friends greetings for the day, in the current article we will discuss about resignation of directors as provided in Companies Act 2013, its Rules and implications of the same

Manner of Resignation

As per sec 168(1) of Companies act 2013, A director may resign from his office by giving a notice in writing to the company and the Board shall on receipt of such notice take note of the same and the company shall intimate the Registrar in such manner, within such time and in such form as may be prescribed and shall also place the fact of such resignation in the report of directors laid in the immediately following general meeting by the company.

Provided that a director may also forward a copy of his resignation along with detailed reasons for the resignation to the Registrar within thirty days of resignation in such manner as may be prescribed.

In simple words a director can resign after giving a notice in writing to the company and on receipt of the notice of resignation next step would be to intimate the Registrar of companies after that company will put forward all the facts and reports in the next general meeting.

1.Is it possible to reject the resignation of “Director” by Key managerial persons?

As per the provisions of section 168 of Companies act 2013, no right has been given to any managerial person to reject the resignation given by Directors.

2. Liability of directors during there tenure?

The Directors who has resigned shall be liable even after his resignation for the offense which have occurred during his tenure.

Rule 15 & 16 of the Companies (Appointment and Qualification of Directors) Rules, 2014

As per Rule 15 The company shall within 30 days from the date of receipt of notice of resignation from a director, intimate the Registrar in Form DIR-12 and post the information on its website if any.In simple words company has to file DIR-12 within 30 days of receipt of notice of resignation by the director.

As per Rule 16 Where a director resigns from his office, he may within a period of thirty days(30) from the date of resignation, forward to the Registrar a copy of his resignation along with reasons for the resignation in Form DIR-11 along with the fee as provided in the Companies (Registration Offices and Fees) Rules, 2014. Provided that in case a company has already filed Form DIR-12 with the Registrar under Rule 15, a foreign director of such company resigning from his office may authorise in writing a practising chartered accountant or cost accountant in practice or company secretary in practice or any other resident director of the company to sign  Form DIR-11 and file the same on his behalf intimating the reasons for the resignation.

Effective date of Resignation of Director

As per section 168(2) of Companies Act, 2017 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.

1.Effective date of resignation in case of non acceptance and non filing of DIR-12 by the company?

In case a Director who has submitted his resignation for example lets say on 31st July 2019 from the post of director to the board of directors and the board of directors neither accepted the resignation nor it filed the form required to be filled by the company to the Registrar of companies then as per sec 168(2) of Companies act,2013 the director who has resigned would cease to be a director with effect from 31st July 2019.

Resignation or Vacation of all the Directors

As per section 168(3) of Companies Act 2013, 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.

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December 2020