SECTION 168 OF COMPANIES ACT 2013: RESIGNATION OF DIRECTOR
Introduction
The term ‘Director’ means to manage a company's business and affairs. Every registered company must have at least one director. And the group of Directors is known as the Board of Directors. The Board of Directors is responsible for directing, controlling, and managing the business and affairs of the company.
Directors act on behalf of the shareholders or members of a company, exercising its powers. A director has the right to resign from their position at any time.
A director may resign from their position by submitting a written notice to the
company. The Board of Directors is required to agree and document the resignation upon receipt. The resignation takes effect on the date the company receives the
notice.
In this Article, we will discuss about the Resignation of Directions under Section 168 of Companies Act 2013.
Provision related to Resignation of Director under Companies Act, 2013
i) As per 168 of Companies Act, 2013, a director may resign from his office by giving a notice in writing to the company and the Board on receipt of such notice take note of the same and the company shall intimate to the Registrar within such time by prescribed form and shall also place the fact of resignation to the Director Report.
ii) The resignation of a Director shall take effect from the date on which notice is received by the Company or the date which is mentioned on the notice by the director, whichever is later. Provided that the director who has resigned from his office shall be liable for the offences which occurred during his tenure even after his resignation.
iii) Where all the directors of the company resign or vacate their offices then the promoter or his absence, the Central Government shall appoint requisite no the directors till the directors are appointed in general meeting.
Procedure
Step1: Submission of Written Notice:
A director who wants to resign must write a resignation letter to the company in the form of email, fax, and written letter, oral letter or something will not be acceptable. The letter should be sent to the Board of Directors or the company secretary and should clearly state that they are resigning.
Step 2: Agreed by the Board:
After receiving the resignation notice, the Board of Directors must formally admit the resignation. This can be done during a board meeting or through a resolution passed by circulation.
Step 3: Notifying the Stock Exchange for a Listed Company
For listed companies, when a director resigns, the company must inform the stock exchange within 24 hours after the Board meeting. Additionally, this information should be posted on the company’s website within 2 working days.
Step4: Recording the Resignation:
The minutes should be written and shared with all directors within 15 days after a board meeting ends. Directors then have 7 days to review and provide any comments on the draft minutes.
Step5: Filing of E-Form DIR-11
This form is filed by the Director when they resign from his office within a period of thirty days from the date of resignation, send a copy of resignation and the reasons for it to the Registrar using Form DIR-11.
Step6: Filing Of E-Form DIR-12
The company must submit E-Form DIR 12 with the required documents to the Registrar of Companies (ROC) within 30 days after receiving the resignation notice.
Step7: Update on the Website.
If a company has a website, then it should be putting the information about the resignation of the director.
Step8: Updating Company Records
The company must update its records, such as the register of directors, to reflect the change.
Step9: Final Settlement:
The Board’s Report must include details of directors who have resigned during the year.
Director Resignation Letter Format
[Date]
[Director Name]
To,
The Board of Directors
[Company Name]
[Company Address]
Dear [Recipient’s Name],
Subject: Resignation from the Position of Director
I am writing to formally resign from my position as Director of [Company Name], effective [Effective Date].
After careful consideration, I have decided to step down due to [brief reason for resignation, if desired, e.g., personal reasons, new opportunities, etc.].
I have appreciated the opportunity to serve on the Board and contribute to the growth and success of the company. I will ensure a smooth transition of my responsibilities and am available to assist in any way needed during this period.
Please let me know if there are any specific procedures or documentation required to complete my resignation process.
Thank you for your understanding and support.
Sincerely,
[Director Name]
[Signature, if submitting a hard copy]
Board Resolution Format
BOARD RESOLUTION
ITEM-1: RESIGNTION OF DIRECTOR FROM THE BOARD OF THE COMPANY
“RESOLVED THAT pursuant to provisions of section 168 of The Companies Act, 2013 the resignation of Mr._____________ (DIN: ________) from the directorship of the Company of be and is hereby accepted with effect from close of the business hours on ___________.
RESOLVED FURTHER THAT the Board places on record their appreciation for the cooperation, assistance and guidance provided by Mr. ___________ during his tenure as Director of the Company.
RESOLVED FURTHER THAT any existing director of the company be and is hereby authorized to sign and file necessary E-Form and documents with Registrar of Companies, Ministry of Corporate affairs and to do all other such acts, deeds and things which are necessary and as may be required in this regard.”
Certified True Copy
For (Company Name)
(Director Name)
Director
DIN: _____________
Komentar