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According to Section 169,
a company may, by ordinary resolution, remove a director, not
being a director appointed by the Tribunal under section 242, before the expiry
of the period of his office after giving him a reasonable opportunity of being heard.
The provision relating
to removal shall
not apply where
the company has availed itself of the option to appoint not less
than two – thirds of the total number of directors according to the principle
of proportional representation.
Procedure for Removal of Director by Shareholders
The following procedure is required to be adopted for the removal of a director:
1. A Special Notice from a member of the company
proposing an ordinary
resolution for removing the director is necessary.
proposing an ordinary
resolution for removing the director is necessary.
2. Send forthwith a copy of the special
notice to the director proposed
to be removed.
notice to the director proposed
to be removed.
3.
Decide to call a general meeting
through the Board resolution.
Decide to call a general meeting
through the Board resolution.
4. Issue notice
of the general meeting in writing at least twenty-one clear days before
the date of the meeting informing about the special
notice and proposing the ordinary resolution for removal.
of the general meeting in writing at least twenty-one clear days before
the date of the meeting informing about the special
notice and proposing the ordinary resolution for removal.
5. In the notice of the meeting
, state the facts of the representation made by the director concerned and also send a copy of the representation to every member of the company to whom notice of the meeting is sent
(whether before or after the receipt of the representations by the company).
, state the facts of the representation made by the director concerned and also send a copy of the representation to every member of the company to whom notice of the meeting is sent
(whether before or after the receipt of the representations by the company).
6. If the
representation is received too late and it could
not be sent
to the members,
the director concerned may require that the representation shall
be read out at the
meeting. The director concerned has also
the right of being heard at the meeting.
representation is received too late and it could
not be sent
to the members,
the director concerned may require that the representation shall
be read out at the
meeting. The director concerned has also
the right of being heard at the meeting.
7. However, the National Company
Law Tribunal on an application of the company
or any other person who claims to be aggrieved, on having
satisfied, may dispense with the procedure of sending a copy of representation and reading
thereof at the meeting, if it is being used to secure
needless publicity for the defamatory matter.
Law Tribunal on an application of the company
or any other person who claims to be aggrieved, on having
satisfied, may dispense with the procedure of sending a copy of representation and reading
thereof at the meeting, if it is being used to secure
needless publicity for the defamatory matter.
8. In the case of listed
company, forward
three copies of the notice of the general
meeting to the stock exchange(s) where the company is listed.
company, forward
three copies of the notice of the general
meeting to the stock exchange(s) where the company is listed.
9.
Hold the general meeting
and pass the proposed resolution by ordinary resolution.
Hold the general meeting
and pass the proposed resolution by ordinary resolution.
10. In the case of listed
company, forward
a copy of the proceedings of the meeting
to the stock exchange(s) where the company is listed.
company, forward
a copy of the proceedings of the meeting
to the stock exchange(s) where the company is listed.
11. In case
of a listed company, notify
the change in directors of the company
to the stock exchange(s) where
the company is listed.
of a listed company, notify
the change in directors of the company
to the stock exchange(s) where
the company is listed.
12. The company
has to file particulars of director in Form DIR – 12 with the Registrar of Companies within thirty days of the removal
after paying the requisite fee electronically.
has to file particulars of director in Form DIR – 12 with the Registrar of Companies within thirty days of the removal
after paying the requisite fee electronically.
13. Ensure that said Form is digitally signed by managing
director or manager
or secretary of the company.
director or manager
or secretary of the company.
14. In case
of a listed company, particulars of removal of director should
also, be given
to the stock exchange if the
shares of the company are listed.
of a listed company, particulars of removal of director should
also, be given
to the stock exchange if the
shares of the company are listed.
15. The particulars of the director
and other aspects
of the director have to be entered
by the company in the registers maintained under Sections
170 and 189.
and other aspects
of the director have to be entered
by the company in the registers maintained under Sections
170 and 189.
16. After the appointment the director concerned has to inform
other companies in which he is director
about his appointment.
other companies in which he is director
about his appointment.
17. Give
a general public notice in the newspaper regarding the removal of the director if it is
so warranted for the protection of the company and benefit of the general
public.
a general public notice in the newspaper regarding the removal of the director if it is
so warranted for the protection of the company and benefit of the general
public.
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