Remove a director

Remove a Director from the Company

Directors run the company on a daily basis, but the shareholders, who own the company, appoint them to take care of things as their representatives. Under the Companies Act 2013 in India, the rights and duties of directors and shareholders are clearly defined and separated. Generally, the same entity that appoints a director also has the power to remove them.  Startup Club India is here to assist you in filing for the removal of the director, which can be initiated for various reasons. We are available to simplify the director removal process for your Company, providing an easy and hassle-free experience. If you want guidance in removing of director for a private limited company in Delhi, then you have come to the right place, we make sure to provide you with a smooth and easy process.

Reason for Director Removal

A director might be removed for any of these reasons:

• If the director becomes disqualified under the rules set by the Companies Act.
• If the director is away from board meetings for over a year.
• Making agreements or contracts that violate the rules mentioned in Section 184 of the Companies Act.
• When an official order from a court to the disqualification of the director.
• If a court convicts the director of an offence and sentences them to at least six months behind bars.
• Not following the rules and requirements set out in the Companies Act of 2013.
• Willingly quitting/resigning from their position.

Methods for Director Removal

The process of removing a director from a company can be done in three distinct ways:

• Resignation by Directors: When the directors willingly tender their resignation.
• Director Absence from Board Meetings: When a director fails to show up at board meetings for over 12 months.
• Shareholder-initiated Removal: If the shareholders decide to remove a director from their position.

Relevant Provisions of the Companies Act, 2013:

• Section 169 of the Companies Act, 2013, this section covers the process and requirements for removing a director.
• Section 115 of the Companies Act, 2013 likely deals with the appointment of extra directors, but we need more context to explain it fully.
• Section 163 of the Companies Act, 2013 provides for proportional representation in the appointment of directors, and this can play a role in the removal process based on the company’s governance.
• Rule 23 of the Companies (Management and Administration) Rules, 2014 it deals with the management of companies. It basically includes specific guidelines about how directors can be removed and the related processes.

Compulsory Criteria for Director Removal

To remove a director, certain essential steps must be followed to ensure the process is done properly:

Implications of Director Removal

The removal of a director can lead to important changes for both the company and the person involved. Some important factors to think about include:

• Termination of Director's Duties: After a director is removed, they no longer has any role in managing the company or making decisions.
• Loss of Decision-Making Role: Once a director is removed, he/she can no longer make decisions for the company or represent it in any way.
• Risk of Legal Action: If a director is removed improperly, the company could face legal consequences and possible financial losses.
• Damage to Company Image: When a director is removed, it can affect how people see the company, so managing the process privately and thoughtfully is important for the company.

Removing a director for a private limited company requires careful observation to legal procedures to avoid complications. Whether you need to remove a director for a private limited company in India due to non-compliance or other reasons, following the right process is essential. Our experts ensure a smooth, legal director removal from a PVT LTD company with minimal hassle.