A director may resign from his office by giving a notice in writing to the company and the Board shall on receipt of such notice take note of the same and the company shall intimate the Registrar within time and shall also place the fact of such resignation in the next directors report.
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Resignation of a Director
Section 168 of the Companies Act,2013 provides a procedure for the resignation of the director.
Any director can resign from his office by furnishing written notice to the company. After collecting such notice, the Board shall take note of the same, and the corporation shall intimate the Registrar in such a manner, time, and form as designated. Provided that-
The company shall place the case of such resignation in a report of directors shortly after the general gathering of the company.
The director shall also intimate and forward a copy of his resignation along with a precise reason for his resignation to the Registrar within 30 days of resignation.
The resignation of a director should take its influence from the date on which the company accepted his notice or from the itemized period mentioned by the director in mind, whichever comes later: Provided- that the director who has resigned should be liable for the offenses which appeared during his tenure even after the resignation.
Whenever all the directors of a company resign at the identical time, then the promoter or the Central Government shall select the expected number of directors during which old directors have to hold company till the new ones get nominated by the company in general meeting.
A notice has to be served by the director to the company mentioning about the resignation.
Form DIR- 11 has to be filed by the Director under his digital signature.
On receipt of the notice, the company has to pass the board resolution and has to intimate the RoC by filing form DIR 12 with Reason for Resigning, Proof of Dispatch and Notice that is sent to the Company (Copy) within 30 days of resignation.
1. Can the resignation of Director be rejected?
As per section 168 of Companies act 2013, the administration does not have any right to reject the resignation presented by a director.
2. From which period the resignation will be valid?
As per section 168(2), the resignation shall be effective from
a. Date on which notice is received by company or
b. Any other date specified by director in notice of resignation
3. Which is the effective date of resignation in case of non-acceptance of resignation notice, and non-filing of form DIR-11, by the Association?
The effective date of withdrawal will be the date on which the director presents the same to the Board of directors.
4. If all the directors resign or vacate their offices then who runs everything?
If so, the promoters will take charge. If there are no promoters, the central government will provide for temporary directors to manage the Company, until fresh directors are appointed.
5. What are Liabilities of resigning director?
As per section 168(2), the director who has resigned shall be liable even after his resignation for the offences which occurred during his tenure.
6. What are the compliance if there are only 2 directors in the company?
Scenario 1. the Company can refer Section 174(2) of the Companies Act, 2013 and it’s Articles of Association for the remedy. Section 174(2) provides if the number of directors falls below the quorum then the continuing directors:
may appoint a director in the meeting for increasing the number of directors to that fixed for the quorum or
Summon a general meeting of the company to appoint a director and for no other purpose.
Clause 69 of Table F provides that if the number of directors falls below the quorum fixed by the Act, the remaining directors can, for increasing the number of directors to that fixed quorum, summon a General Meeting of the Company.
Scenario 2. the Company can refer section 168(3) of Companies Act, 2013. The section provides that when all the directors of a company resign from the Board, the promoter or the Central Government in promoter’s absence, shall appoint the required number of directors who shall hold office till the directors can be appointed in the general meeting.