Resignation of a Director in a Company
A company's director might consider stepping down, or the Board of Directors might contemplate removing a director for various reasons. When deciding to resign, a director must submit a formal resignation letter to the company and notify the ROC accordingly. In this guide, we delve into the steps a director should take when intending to step down from their role.
Upon submitting a written notice to the Company, a Director has the option to resign. The Board must notify the ROC of this resignation within a 30-day period using Form DIR-12. Additionally, the Director can provide the ROC with a copy of the resignation letter, accompanied by the reasons, utilizing Form DIR-11. Below is a template for a Director's resignation letter:
- Upon receiving a resignation notice, the Board of Directors must deliberate on the matter and subsequently pass a resolution to acknowledge the resignation. It's imperative to document this discussion through the Board of Directors' meeting minutes.
- As per Rule 15 of the Companies Act, 2014, the Registrar must be notified using Form DIR12 within 30 days from the resignation acknowledgment date.
- The resignation details should be incorporated into the Director's report during the annual general meeting and prominently displayed on the Company's website.
- When submitting DIR1, the company must include the following attachments:
1) Resignation Notice (Compulsory)
2) Proof of Termination (Either a board resolution or an acceptance letter can serve as evidence)
- After the Board accepts a Director's resignation, they aren't accountable for any company liabilities arising post-acceptance.
- Nevertheless, a Director remains responsible for any past offenses committed during their tenure with the Company.
