What is Removal of Director?

The Removal of Director is a formal legal process by which a company eliminates an individual from the Board of Directors before the completion of their tenure. This process is governed by Section 169 of the Companies Act, 2013, and ensures that any change in the directorial structure is lawfully executed and recorded with the Registrar of Companies (ROC).

Common reasons for removing a director include non-performance, misconduct, loss of trust, or change in business requirements. The removal may be initiated either by the Board of Directors or the shareholders by passing a special or ordinary resolution in a general meeting.

This process is critical for maintaining effective corporate governance, protecting the company’s interests, and ensuring leadership aligns with the company’s vision.

✅ Benefits of Removing a Director
🎯 Written from the client’s perspective.

1️⃣ Maintains a focused and competent board aligned with business goals
2️⃣ Protects the company from liability due to inactive or non-compliant directors
3️⃣ Enhances internal governance and investor confidence
4️⃣ Helps resolve internal conflicts and deadlocks within the company
5️⃣ Prevents misuse of powers by directors no longer serving company interests
6️⃣ Ensures compliance with MCA records and legal standing
7️⃣ Opens space for onboarding more strategic and qualified leaders

📑 Documents Required for Removal of Director
📂 Important documents with brief descriptions.

1️⃣ 📄 Board Resolution – Initial resolution proposing director removal
2️⃣ 🧾 Notice of General Meeting – 21-day notice to all members/shareholders
3️⃣ 📋 Ordinary or Special Resolution – Resolution passed in general meeting
4️⃣ 📑 Form DIR-12 – Filing with ROC for director removal
5️⃣ 🪪 Resignation Letter (if applicable) – From the outgoing director
6️⃣ 🗂️ Updated MOA/AOA (if necessary) – Only if clauses restrict removal process

👤 Eligibility for Removal of Director
🧾 Who can initiate or undergo this process?

The following companies can remove directors under the Act:

• Private Limited Companies

• Public Limited Companies

• One Person Companies (with Board resolutions)

• Section 8 Companies (with extra precautions)

A director can be removed:

• Before tenure ends, via shareholder resolution

• If absent from board meetings for 12 months

• Due to misconduct, breach of fiduciary duty, or company decision

🔄 Process of Removing a Director
🔁 Step-by-step explanation of the process.

1️⃣ Board Meeting – Pass a resolution proposing removal and calling for EGM
2️⃣ Issue Notice of EGM – Send a 21-day notice to all shareholders
3️⃣ Conduct EGM – Discuss and vote on the resolution for removal
4️⃣ Pass Resolution – Ordinary or special resolution passed by majority
5️⃣ File DIR-12 with ROC – Submit director removal details within 30 days
6️⃣ Update Company Records – Reflect the change in internal and MCA records

⏱️ Timeline for Removal of Director
⏳ Approximate duration and influencing factors.

• Board Resolution & EGM Preparation – 3–5 working days

• Notice Period for EGM – 21 clear days (as per Companies Act)

• Post-Resolution ROC Filing – Within 30 days of EGM

Total duration: Around 25–35 days, depending on meeting schedules and ROC processing.

❓ Frequently Asked Questions (FAQs) about Removal of Director

1️⃣ Can a director be removed without their consent?
Yes, if the removal is approved by shareholders via a valid resolution.

2️⃣ Is it mandatory to give the director an opportunity to be heard?
Yes, the director must be given a fair chance to present their case before removal.

3️⃣ What form is used to inform ROC of the removal?
Form DIR-12 must be filed within 30 days of passing the removal resolution.

4️⃣ Is a special resolution always required?
Usually, an ordinary resolution is sufficient unless otherwise stated in AOA.

5️⃣ Can a resigning director be removed simultaneously?
Yes, but resignation and removal are different processes; proper documentation is needed for both.

6️⃣ Can a director be removed for not attending meetings?
Yes, if absent for all board meetings over 12 months without leave, the position is vacated.

7️⃣ What if the director is also a shareholder?
They retain their shareholding but can still be removed from the board role.

8️⃣ Can the company appoint another director immediately?
Yes, a new director can be appointed in the same meeting, if planned.

9️⃣ Are there penalties for improper removal?
Yes, it may lead to disputes, penalties, or invalidation of the process.

🔟 Do you assist with drafting resolutions and filing DIR-12?
Absolutely. We provide end-to-end support from legal drafting to ROC compliance.