A Director of Board is an entrusted person with enormous powers and responsibilities, however, can be abolished from the designated responsibilities, on failing to perform as per the desired requirements for the position.
Digital Filings can help you in…:
Ascertaining correct procedure to be followed
Drafting the Board’s Resolutions
Filing application to the concerned authority
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Understanding Removal of Director
Management and operations of a company depend on its Board Members who are responsible for taking critical business decisions for the welfare of an entity. The future and growth of a company depends on how its appointed Directors perform and thus it is important that each Director shall efficiently carry out the prescribed responsibilities.
As per Section 71 under Companies Act, 2008 a Board Directors can be removed from their designated position by Shareholders or the Company’s other Board Members, if they failed to behave ethically or missing Board Meetings for straight 12 months. A Director is also empowered to resign from the Company’s Board. In both scenarios, the Company needs to notify the Ministry of Corporate Affairs (MCA) regarding the alteration to be made on Memorandum of Association (MOA) and Articles of Association (AOA) of the Company.
The procedure of removal or resignation of a Board Director varies and depends on the existing Board Members. It is suggested to have complete knowledge of the matter before moving towards the prescribed process.
Reasons to Remove Director(s)
If a Director of Board failed to act or perform as per defined business ethics or being involved in a scandal, the remaining Board members and / or Shareholders may abolished such individual from the designated Board of the Company.
Board Directors might have different opinions for certain Company decisions and if such difference from any Board Member act as a hindrance to some advantageous decisions for Company and result in management disputes, then it is best to either remove or request such Member to leave the Board.
Post attaining a specific objective and completing any assigned task, a Board Director can either step down or asked to leave the Board Membership, thus creating vacant space for aspiring Directors who can effectively drive a Company’s growth.
A Company’s Board Director must know about the ongoing business affairs and shall regularly attend board meetings. As per the guidelines of Section 167 under Companies Act, 2013, if Directors fail to attend the meetings for 12 consecutive months then their name can be removed from the Board.
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A Company can remove Directors from its Board if they failed to meet the prescribed requirements as specified under the concerned Acts.
Trained Experts @ Digital Filings can proficiently assist a Company with the defined process for Removal or Resignation of a Director from its Board.
- Resignation of a Director from the Company’s Board of Directors with resigning Directors’ consent.
- (Above price includes all taxes and relevant government fees.)
- Removal of a Director from the Company’s Board of Directors without the resigning Directors consent. (Above price includes all taxes and relevant government fees.)
- Removal of a Director from the Company’s Board of Directors without resigning Directors consent by serving notice. (Above price includes all taxes and relevant government fees.)
How we Do It…
The MCA instructs a Company to notify addition or removal of a Board of Directors. Digital Filings can help Companies in completing relevant formalities within 7 to 10 working days.
The Procedure to be followed for the removal of a Director depends on the reason of termination and existing Board Members. An expert @ Digital Filings will gather all relevant information and go through the case to suggest Companies a suitable procedure.
Drafting Board Resolutions
A Special Resolution is prepared to state the reasons involved for removal of a Director. After sending the resolution, a meeting is conducted for hearing the points of Director concerned. If a satisfactory reply or explanation is not attained, the existing shareholders and Board Members will approve the special resolution confirming removal of the Director.
Filing Form DIR-12
After receiving approval on a special resolution, Partner @ Digital Filing will submit the removal application along with the required documents to the concerned authority and the Director will be removed within the specified period of time.
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