The director of the company plays a vital role in the overall management and growth of the business. But, is the director supreme in nature? Well, the answer is no and the removal of a director in a private limited company is very much possible under section 169 of the companies act 2013.
The director of the company may be removed on the following grounds:
There are three possible ways by which removal of a director is possible:
When a self-designation is given by the director, a notice must be issued by the company to hold a board meeting by giving 7 days of notice. In the meeting, the members take into account the resignation and pass a resolution to initiate the further process. DIR-11 by the director and DIR-12 must be filed by the director and the company respectively. After completion of all the formalities, the removal of the director is completed.
Failure to justify the reason of absence, a director is believed to be vacated from his post. DIR-12 filing with the ROC and completing all the formalities does the job of removal.
Shareholders have the power to participate in the process of removal of a director. A resolution was passed by the shareholders in the general meeting. Two meetings are conducted and the consent of the shareholder to remove the director is taken into account. Further, the shareholders file Form DIR-12. The MCA removes the name of the director from its website after all the submission is done.
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