Removal of a Director

Welcome to our guide on the removal of directors in various types of companies in India. Whether you operate a Private Limited Company, Public Limited Company, or a One Person Company (OPC), understanding the grounds for removal, the process involved, and related FAQs is crucial for maintaining effective corporate governance. Let's delve into the details:

Types of Companies in India:

1. Private Limited Company:
  • Minimum two and maximum 200 members.
  • Limited liability for members.
  • Shares cannot be freely traded on the stock exchange.
  • 2. Public Limited Company:
  • Minimum three directors and seven members.
  • Can raise capital through the public by issuing shares.
  • Shares are freely transferable on the stock exchange.
  • 3. One Person Company (OPC):
  • Single-member company.
  • Limited liability for the sole member.
  • Can have more than one director.
  • Grounds for Removal of Director:

    1. Breach of Duty:
  • If a director breaches their fiduciary duties or acts against the interests of the company.
  • 2. Misappropriation of Funds:
  • If a director is found involved in misappropriation or embezzlement of company funds.
  • 3. Insolvency:
  • If a director becomes insolvent or bankrupt.
  • 4. Criminal Offenses:
  • Conviction of a director for any criminal offenses.
  • 5. Non-Performance:
  • Persistent non-performance or negligence in discharging duties.
  • 6. Shareholder Vote:
  • Removal through a special resolution passed by shareholders in a general meeting.
  • Process of Removing a Director:

    1. Board Meeting:
  • Convene a board meeting to discuss and decide on the removal of the director.
  • 2. Special Resolution:
  • Pass a special resolution in a general meeting to seek approval from shareholders for removal.
  • 3. Filing with RoC:
  • File the necessary forms (such as DIR-12) with the Registrar of Companies (RoC) within 30 days of the removal.
  • 4. Intimation to Director:
  • Provide a notice to the director being removed, informing them of the decision.
  • Why choose JKStartup360?

    Ensuring the proper removal of a director is crucial for the corporate health of any company. At JKStartUp360, we provide expert guidance and services for the removal and compliance of directors across various types of companies. For personalized assistance or further queries, please feel free to contact our team of experts.

    Yes, a director can be removed by passing a special resolution even without their consent.

    Legal actions can be initiated against the director to enforce the removal.

    The Companies Act does not specify a cooling-off period. Reappointment is subject to the company's Articles of Association.

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