Resignation of Director

The resignation of director from the office of the director by writing a notice to the company. The Companies Act, 2013 provides the procedure through which a director can resign from the office of director.

The director has to give notice in Form DIR-11 to the Registrar of companies. The resignation must be sent to the Board of the company and must mention the date on which the resignation is to take effect.

The Form DIR-12 is filled for Appointment and resignation or change in designation of the director.

Procedure for Resignation of Director in Private Limited Company

The process of the resignation of the director in the Companies Act, 2013 is as follows:

Step 1 : A notice is to be served by the director of the company mentioning the reason for resignation. Under the Companies Act, 2013 the ‘ease of exit’ is given to the director by sending a resignation to the company. After the amendment Act, 2017, the director has the option to forward a copy of Form DIR-11 to be filled with his digital signature certificate (DSC). A director must enclose a detailed reason with a notice of resignation.

Step 2 : After receiving the notice the company has to pass a board resolution in a board meeting for following the resignation of director procedure and have to intimate the ROC by filing Form DIR-12 the reason for resignation. The proof of dispatch and a notice is sent to the company within 30 days from the date of receiving the resignation with the requisite fees as per the Companies (Registration Offices and fees) Rules, 2014 with the required documents. The effective date is the time when the intention to relinquish the office as a director is communicated. The date can be considered as the effective date for resignation:

• The date for the notice is received by the company, or
• The date mentioned by the director in the notice. Whichever is Later.

The company has to publish the notice on the official website and the resignation of director resolution is passed.

Step 3 : When the directors resignation letter mentions the approval of the board and the article of association is silent then the approval will be accepted.

Step 4 : All the members of the board may resign at the same time by serving the notice to the company as prescribed.

Procedure to File Form DIR-11

This form is to be filled to give notice of resignation of the director to the Registrar of companies. The details that must be entered are as follows:

• Details of the company
• DIN of the resigning director
• Date of filing the resignation with the company
• Reasons for the resignation
• Attachments as per the resignation of director under Companies Act, 2013 are as follows:

1. Notice of Resignation filed with the company

2. Proof of dispatch

3. Acknowledgment received from the company

4. Any other optional attachment

Documents Required for Filing Form DIR-11 with the ROC

Form DIR-11 with the ROC can be filled by any director of a company registered in India. The documents required are as follows:

• The original copy of Form DIR-11 duly signed by the director.
• A duly attested copy of the resignation letter of the director was given to the company.
• An affidavit from the director in the specified format, declaring that he/she is not holding any office or position in any other company.
• A board resolution acknowledging the director’s resignation
• Copy of PAN card
• Copy of address proof

Procedure to File Resignation of Director Form DIR-12

1. Download the Form
The Form must be downloaded from the MCA portal.
2. Enter CIN & click on Pre-fill
Users can avail of the pre-fill facility which auto-fills the form based on details that have been collected. The device will automatically display the name of the company, the address of the registered office and the email ID of the company.
3. Fill in the number of directors and details for them
The form must be filled out carefully and all the details must be provided.
4. Fill in the number of directors, Chief Financial officer or Chief Executive officer and details for them
5. Enter the contact number and details of the company’s managers, CFO, and secretary.
6. Attach documents of the resignation of director.
7. Enclose the digital signature and submit the form
Before furnishing the DIR-12 form, examine the errors. Enclose the DSC to authenticate the form, Tap the option ‘Submit’.
8. Pay the E-form fees and secure the Service request number (SRN)
After uploading the E-form, the website shall direct you to submit challan payment. Do the needful for completing the payment process. The website will generate the SRN number for future reference.

Attachment to E-Form DIR-12 in case of resignation

• Notice of Resignation for cessation of a director
• Proof of Resignation
• Any other details can be provided as an optional attachment.

Notice of Resignation of Director in Word Format

Date:
To,
The board of directors
(Name of the company)
Address: __________
Subject: Resignation letter
Dear Sir/Ma’am,
I, _________, R/o _________, due to personal and unavoidable circumstances, do hereby tender my resignation from the Directorship of the company with immediate effect. Kindly accept this letter as my resignation with immediate effect from the position of director of the company and relieve me of my duties.
Kindly acknowledge the receipt of this resignation letter by the director and arrange to submit the necessary forms to the office of the registrar of companies to that effect.
Thanking you,
Yours faithfully
Name of director: _________
DIN: ___________

Acknowledgment Letter of Resignation of Director by the Company

To,
Dated:
Mr._____________
Address,
Subject: Acknowledgment of resignation,
Dear Sir,
This has reference to the resignation letter dated _________. In this regard, please be informed that the Board of directors has approved your resignation w.e.f. ____________, in the duly held Board meeting dated _________.
The Board sincerely appreciated the association with the Company and the support which you have rendered during your term.
Thanking you,
Yours Faithfully,
___________ Private limited.
(Director)
DIN: _________.

Board Resolution for Taking Note of Resignation

Certified True copy of the resolution passed at the meeting of the board of directors of ABC Private Limited held on ________ at 12.00 P.M. at ________ Resignation of Mr. ________ as director
‘Resolved that resignation of director, i.e., Mr. _______ as director, from the board of directors of the company, be and is hereby accepted with effect from __________(date).
Further resolved that to provide an effect to this resolution, Mr. __________, director of the company be and is hereby authorized to do all acts, deeds, matters and things as deemed necessary, proper or desirable and to sign and execute all necessary documents, applications and return of resignation along with filling of necessary E-Form with the registrar of companies (ROC).
Certified True Copy
For ABC Private Limited
(Name of the director)
Director
Address
DIN:

Reasons Behind the Resignation of Director

There must be a minimum of two directors in a private limited company as per the Companies Act, 2013. If a company has only 2 directors and one of them wants to resign on their own, it will violate the provision of the act.

At the time of filing Form DIR-12, the resignation of one director will not be allowed. The following are the reasons for resignation as given below:

• Better Career Options

  A person seeks a more beneficial career opportunity by enlarging their domain and chooses that option that encourages inner enthusiasm. Therefore, he may give a resignation letter to the director when he gets better offers from other companies. The resignation of director section 168 provided by the Companies Act, 2013.

• Dispute with the Board

  When several directors work commonly, a difference of opinion happens. This can result in hindering the overall performance of the company in such a position. Thus, a director may decide to take resignation.

• Resignation of the Director happens when they misuse powers in the company

  When a director is introduced to the illegal practices of the company then he can become a part of the same which leads to resignation. For defending himself from personal liability for such activities he chooses to resign.

• Recession of Nomination

  This is appropriate to the nominee directors for the resignation of director, who is primarily appointed by the NBFCs investors on the BOD. Once the transaction between the company and entity is complete, the nominee director can resign anytime or leave after the removal of the nomination.

• Unethical Behavior

  The board of a company is trusted by the members for making important decisions for the future. If a director is seen behaving in an unethical manner with their employees, and customers then the company’s reputation gets destroyed.

• Absent in Board Meeting

  When a board member is absent from the meeting then he/she is not contributing his/her part to the company.

Resignation by Foreign Director

As per a rule of the Companies Act, 2013 which provides that in case a company has already filed Form DIR-12 with the registrar under the specific rule, a foreign director of such company resigning from his office may authorize in writing a practicing-chartered accountant or company secretary in practice or any other resident director of the company to sign Form DIR-11 filed for the resignation of director on the behalf with sending the reasons for the resignation.

Resignation by Nominee Director

A nominated director represents the interest of the company who nominated him/her continuation is subject to the pleasure of the nominating company, therefore, a nominee director is primarily responsible for the company which nominated him.

He may send his resignation to the company that has nominated him and even without any such resignation letter, the company that has nominated him will be at liberty to withdraw his nomination.

In any of the given events, if a resignation letter is submitted by a Nominee director to the company and the resignation of director, who nominated him, it is for the given company to act for the same and for withdrawing the nomination of the director. There is no provision for resignation by the director, there is no provision for withdrawal in the companies act.