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There can be many reasons for the resignation of a director. A director can resign:-
  • Due to issues with health.
  • If having conflicts with the company or with any director.
  • Due to changes in the company’s ownership.
  • If having a desire to move with another company.
  • Due to relocation and retirement planning.
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Resignation of Director

An Overview - Resignation of Director

Quitting as a director is same to resigning from a job or position. It is a personal option or a choice made by the individual wishing to leave. Thus, when a director resigns, he or she must communicate the resignation to the company's management team. This requires the company to relieve him/her of his/her tasks and responsibilities. Another component of the director's resignation is that the director must submit a copy of the resignation letter to the (ROC) registrar of companies within a specified time frame.

Management does not have to accept the resignation letter in order for it to be effective. Indeed, it is effective from the date of submission, provided that the resignation is registered with the Registrar of Companies (ROC) within the stipulated time period.

Reasons for Resigning from the office of director

There can be many reasons for the resignation of a director. A director can resign:-

  • Due to issues with health.
  • If having conflicts with the company or with any director.
  • Due to changes in the company's ownership.
  • If having a desire to move with another company
  • Due to relocation and retirement planning.

NOTE- It is required to notify the registrar within 30 days of resignation.

Documents required for Resignation of Director

Documents required for the resignation of the director are:-

  • Resignation notice furnished with the company.
  • Dispatched proof of resignation notice sent to the company.
  • Director may furnish a copy of the acknowledgment of acceptance of resignation received from the company.
  • After acceptance of resignation, the board shall authorize a person to file DIR-12 along with a resignation letter and the resolution passed within 30 days of the board meeting.
  • Director also can use the Board Resolution as evidence of resignation acceptance by the company.

The detailed process of Resignation of Director

When a director or managing director resigns, the Companies Act 2013 specifies that the company must fulfil the following duties and responsibilities:-

  • The first step is for the company to adopt a common resolution validating the notice or letter of resignation and authorising the employee to file form DIR-12 indicating the cause for departure, as specified in section 168(1) of the Companies Act, 2013.
  • Pursuant to Rule 16 of the Companies Rule, 2014 (Appointment and Qualification of Directors), the resignation letter or notice of resignation, together with the reasons for resignation, must be filed with the Registrar of Companies (ROC) using Form DIR-12 within 30 days of the date of resignation.
  • In addition to filing e-Form DIR-12, the business is required to provide a notice or letter of resignation.

FAQs on Resignation of Director

Within 30 days of the resignation filed with the company.
A director must have a valid reason for the resignation of the company that can be issues with the health, retirement, any accident, or desire to move to another company.
The resigning director will be liable even after the resignation for the conflicts and offenses committed by him during his tenure.
To resign, the director should give a letter to the company in writing. Once the resignation is accepted, it cannot be withdrawn without the consent of the company and after the full consideration of directors and shareholders.
As per the section 168 of Companies Act 2013, to resign from the Director’s post, the Director needs to give a notice to the company and the Board of Directors in writing. The company and the director need to intimate it with the ROC by filing prescribed form, within 30 days of resignation.

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