According to the provisions of the Company Act, 2013 it is mandatory for every company to have a minimum number of directors as specified. But if there is removal of any director or resignation given by any director, the company needs to notify and file it with the Ministry of Corporate Affairs.
When resignation is given by the director, in such case the Board of Directors decides whether to accept or decline the resignation. If resignation is accepted then Board passes resolution and files the removal of director with the MCA.
In this case a meeting is organised with the purpose of passing ordinary resolution in favour of removing director. Also the concerned director is given opportunity to be heard before passing the resolution.
When the director of the company abstain himself from attending three consecutive board meetings which mean director is absent for 12 months even after receiving the notice. In such cases, the company files the removal of the director with MCA.
It is necessary to be compliant with the MCA guidelines for the removal of a director.
The first step is giving an opportunity to directors of being heard. The process of removal cannot be initiated without giving the proper opportunity to a director who is to be removed.
The second step is to issue notice. This notice is processed by shareholders holding a minimum voting power of 1% or who hold shares on which an aggregate sum of not more than Rs 5,00,000 has been paid upon the date of the notice. This type of notice is called a special notice that must be signed by all the members. This notice must be delivered at least 14 days prior to the date of the meeting to the company, at which the resolution will be passed.
A copy of the notice must be sent to the director concerned before 7 days of the meeting. And notice must be mandatorily published on the company’s website.
The complete description in writing can be made by the concerned director to the company against the notice of removal. Here the director has a right to make a plea to the company to send the written representation to all the members.
After completing the above steps, the organization or any aggrieved person after sending out representation can make an application to the Tribunal, requesting for nullification of the process.
|Acceptable Document||Document Type||Additional Details|
You Ask, We Answer
Our Financial Expert are available to help you
© 2020 Vireza - Powered By Aifintech Private Limited