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Resignation of Director in Private Limited Company

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Resignation/Removal of Director in Private Limited Company

A Director is a person who controls the company and every decision taken by the company is directed and accounted for by the director. But a director is not the owner of the company, he/she is just an employee working for the company, just at the apex position. Since the director is just an employee, he/she can resign anytime. If due to some unforeseen circumstances or due to some unavoidable situations, a director wants to resign from their position, this article would guide you.

In plain and simple terms, for the Resignation Of Director In A Private Limited Company, there are certain procedures that need to be followed. Basically, it consists of submitting a resignation letter to the company and registering the same in the registrar of companies.

Resignation is voluntarily by director . Removal is done by other directors against the will of director

Types of Director in Private Limited Company

Executive Directoris one who gives his full time of working hours to the company and is involved in day to day activitie

Non Executive Directordoes not devote his full time in the day to day functions of the Company. Only attends Board Meetings and guide the company in its policy matters.

Additional Directoris a director who is appointed at any time between two Annual General Meeting of the Company. Such additional director Resignation need to be regularized as director in next coming AGM.

Process of Resignation of Director in Private Limited Company

Once the company receives the resignation letter from the director, it is the company's responsibility

• Call for Board meeting by issuing notice

• Pass a Resolution for taking note of director Resignation

• Filing of form DIR-12 to make sure that the RoC registers the resignation successfully

Process of Removal of Director in Private Limited Company

Prerequisites: Any fair system listens to both the sides. The director who's employment is being terminated is given a chance to speak for themselves so that their point can be heard taken into consideration.

Issue of notice: A notice of expulsion is to be given to the director to be dismissed containing all the digital signatures and approval of all the upper members of the company. It should be given at least two weeks before the final expulsion. Similarly a notice is to be issued to all the members of the company.

In writing:Of course the director isn’t some clerk that can be dismissed by just vocal dismissal. Everything needs to be in writing and the director who's employment is being terminated must be heard orally of his prerequisites.

Appeal to the tribunal: A tribunal is a body that functions as a court over in a company. This means that all legal works and every decision taken should be thoroughly investigated and care should be taken that the process is performed smoothly without any dishonesty or deception. An appeal is presented to the tribunal regarding the dismissal process.

Documents Required for Resignation of Director in Private Limited Company

  • File form DIR-11

  • Reason for resignation

  • Copy of notice

  • Proof of dispatch

  • File form with the filing fees within 30 days if resigning

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FAQ on Resignation of Director in Private Limited Company

The director can resign by giving the reason.of resignation and resign letter to the company and the RoC and filing the form DIR-11. Contact us Now.

According to section 168, the approval or intentions regarding the resignation doesn't matter. Once the director resigns, the company HAS to accept the resignation..

The moment the company receives the notice of resignation or a specified date present in the resignation letter would be the start of resignation period.

The director shall be responsible for any issues ever after his/her resignation which arose during his/her tenure.

There is nothing specified in the law with respect to notice period. The director may, as a sign of professionalism propose the same in the general meeting with the board of directors.

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