A board of directors is elected or appointed to oversee how the management serves and protects the long-term interests of all the stakeholders of the company. The position of the board of directors is that of trust as a group of trustworthy people look after the interests of the large number of shareholders who are not directly involved in the management of the company. Section 2(34) specifies that "director" means a director appointed to the Board of a company”. The definition of Director is an inclusive definition and includes any person who occupies the position of a director and is termed as Director whether or not designated as Director.
The resignation of director is the same as resigning from a post. It is an individual decision or a choice made by the director intending to quit. There are many reasons why a director may resign from this position, ranging from personal to ethical issues i.e ill health, conflict with other directors, or due change in management or ownership of the company. A director resigns from his position or post by giving written notice.
Applicable Provision:
A director of a company may resign from his office as per section 168 of the Companies Act, 2013 read with Rule 15 and 16 of the Companies (Appointment and Qualification of Directors) Rules, 2014.
Notice by the Director:
Director shall resign from his office by giving a notice in writing to the company. So far, the mode of notice is concerned, a director can give his resignation by way of post or/and by way of e-mail.
Intimation by the company to ROC:
After the receipt of the resignation letter from the concerned director, the company and its Board members should take note of it.
Convene and hold a board meeting after giving notice to all the directors of the company at least 7 days before the date of the Board Meeting and pass a resolution for
File form DIR-12:
The company should file DIR-12 for informing ROC about the resignation of the Director within 30 days from the date of receipt of notice of resignation from the director along with the following document:
The E-form DIR-12 shall be downloaded from MCA portal(www.mca.gov)i.e. Home >MCA Services>E-Filing> Company Forms Downloads.
The E-form DIR-12 needs to be digitally signed by the Director so authorized by the Company in its Meeting and certified by a Chartered Accountant/ Cost Accountant/ Company Secretary in Whole-time practice.
The eForm DIR-12 will be auto-approved in case it is filed by the existing company for the appointment and resignation of the director.
Fee for filing e-form DIR-12:
| Nominal Share Capital | Fee applicable |
|---|---|
| Less than 1,00,000 | Rs 200 |
| 1,00,000 to 4,99,999 | Rs 300 |
| 5,00,000 to 24,99,999 | Rs 400 |
| 25,00,000 to 99,99,999 | Rs 500 |
| 1,00,00,000 or more | Rs 600 |
File form DIR-11:
| Nominal Share Capital | Fee applicable |
|---|---|
| Less than 1,00,000 | Rs 200 |
| 1,00,000 to 4,99,999 | Rs 300 |
| 5,00,000 to 24,99,999 | Rs 400 |
| 25,00,000 to 99,99,999 | Rs 500 |
| 1,00,00,000 or more | Rs 600 |
Resignation by a foreign director:
The foreign director may authorize in writing a Chartered Accountant/ Cost Accountant/Company Secretary in Whole-time practice or any other resident director to sign Form DIR-11 and file the same with the ROC on his behalf.
The board shall place the facts of such resignation by the director in the Director report laid in immediately following the general meeting by the company and post the information relating resignation of the director on its website (if the company has a website).
The resignation shall become effective from the date when the notice is received by the company or the date as may be mentioned by the director in the notice, whichever is later.
Section 168 of the Companies act 2013 provides that the company or management does not have any right to reject the resignation given by a director.
The director will be liable for any offenses that occurred during his tenure even after his resignation.
In a case where all the directors of a company resign from their offices or vacate, the required number of directors will have to be appointed by the promoter of the company. If there is no promoter, the required number of directors will have to be appointed by the Central Government. And appointed directors will hold office until the time directors are appointed by the company in its general meeting.
A director of a company may resign from his position or post by giving written notice.
As per the Companies (Amendment) Act, 2017, it is optional to file form DIR-11 for the resignation of the director. Though the filing of e-form DIR-11 is not compulsory, the director should be advised to file the same.
The foreign director can resign from his office by giving written notice and he may authorize in writing a Chartered Accountant/ Cost Accountant/Company Secretary in Whole-time practice or any other resident director to sign Form DIR-11 and file the same with the ROC on his behalf.
A director's resignation letter clarifies the director’s intention to leave her job as director and sets a final date of service.
Directors are not considered employees. The Board of directors are elected or appointed to oversee how the management serves and protects the long-term interests of all the stakeholders of the company, so they are considered a governing body rather than employees.
Yes, the director can resign from office at any time by giving a resignation letter to the company.
The relevant forms for resignation are as follows: