Compliances-Procedural

Resigning of Director

Resignation of a Director from the Board of a Company with resigning Directors' consent - allied paperwork with filling and submission of Form(s) at an all-inclusive price, including Government Fees*

Complete By* : 17 Jun, 2024

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Resignation of Director - How?

A director may resign from his office by giving a letter in writing to the Company. The Board shall on receipt of such Letter, take note of the same and the Company. The resignation of a director shall take effect from the date on which the notice is received by the company or the date, if any, specified by the director in the notice, whichever is later.

The director, who has resigned, shall be liable even after his resignation for the offences which occurred during his tenure. A director may also forward a copy of his resignation along with detailed reasons for the resignation to the ROC within 30 days of his resignation. 

 

 

Documents Required

Copy of the Board Resolution noting the resignation

Resignation Letter from Director

Date of resignation

Dir 11 if any that has been filed

Shareholder’s resolution, if any

* (All documents in Pdf scanned. Image file in jpeg format)

* (All documents to be Self Attested and signed on each page)

Compliances-Procedural

Resignation of Director

Resignation of director through a written letter

Steps for Resignation

Collect information and documents

Check if Articles of association permit such appointment

Consent from director

Notice for Board Meeting

Appointment at Board Meeting

Issue appointment letter to director

File form with all attachments

Different ways of

Director appointment

The Companies Act, 2013 provides for different ways of appointment of Directors to the Board of a company. In all cases, the appointment of Directors must comply with the provisions of the Act, including eligibility criteria, qualifications, and disclosures. The Act also requires companies to maintain a register of Directors, their appointments, and their shareholding in the company.These include:

Appointment by Board of Directors

The Board of Directors can appoint Additional Directors, who will hold office only until the next Annual General Meeting of the company.

Appointment by Shareholders

Shareholders can appoint Directors by passing an Ordinary Resolution in a General Meeting.

Appointment by Small Shareholders

Small shareholders, who hold not more than a certain percentage of the company's total share capital, can jointly nominate a person to be appointed as a Director.

Appointment by Nomination

Companies, that have taken loans from financial institutions or have government investment, may have a provision for appointment of Directors by nomination from the government or other stakeholders

Resignation by a Director

Resignation of a Director refers to the act of voluntarily stepping down or relinquishing the position of a Director in a company before the completion of his/her term. 

 

A Director may resign from his/ her position due to various reasons such as personal reasons, health issues, other professional commitments, or disagreements with the management or the Board. 

 

A Director's resignation must be communicated to the company through a written resignation letter, and the Board must accept the resignation through a Board Resolution. The resignation must also be intimated to the Registrar of Companies by filing the required forms and documents within the stipulated time period.

 

Contd…

 

Format of Letter of resignation:

 

Dated: …………….

 

To

The Board of Directors

…………………Limited

[Address of Company]

 

Sub: Resignation as a Director 

Dear Sirs/Madams,

This is to inform you that due to personal reasons, I will not be able to devote time to my duties as a Director of the Company. I hereby submit my resignation as a Director of the Company, effective as of the date set forth above.

Kindly acknowledge receipt of this letter and confirm the same.

 

Thanking You

Yours Faithfully



 

[Name of director]

[DIN:..............] 

 

 

Draft Board Resolution accepting the resignation of Director:

 

“Resolved that resignation of Mr. [name of Director] of the Company with effect from close of business hours on [effective date of resignation] be and is hereby read out and noted

 

Resolved further that the Board places on record its appreciation for the assistance and guidance received from by Mr. [name of Director], during tenure as [●] [Designation] of the Company;

 

 Resolved further that Mr./ Ms. [•][Name and Designation of the authorised person] of the Company be and is hereby authorised to sign and file e-Form DIR 12 with the Registrar of Companies, Ministry of Corporate Affairs, and to do all other acts, deeds and things as may be required in this regard.”

 

Letter from Company to Resigning Director 

 

Dated: …………….

 

To

[Name of Director]

[Address of Director]

 

Sub: Noting of resignation and intimation to Registrar of Companies

Dear [Name of Director]

This is to inform you that at a Meeting of the Board held on…………………., your resignation from the Board of the Company has been duly noted. 

The Board places on record its appreciation for the assistance and guidance received from you during your tenure as a Director.

 

Eform DIR-12 has been filed vide SRN………….. Dated ……………….., copies of both the form and SRN attached herewith for your records.

 

Thanking You

 

Yours Faithfully



 

[Name of director]

[DIN:..............]

 

Types of Directors:

 

The Companies Act, 2013 provides for various types of Directors, each with its own roles, responsibilities, and qualifications. The different types of Directors under the Act are:

Executive Director: An Executive Director is an employee of the company who also serves as a Director. They are involved in the day-to-day management and operations of the company. Ex. Managing Director.

Non-Executive Director: A Non-Executive Director does not have any employment relationship with the company and does not engage in the day-to-day management. They provide independent oversight and contribute to strategic decision-making.

Independent Director: An Independent Director is a Non-Executive Director who is independent of the company's management and has no material or pecuniary relationship with the company. They are appointed to provide unbiased and impartial advice and oversight.

Woman Director: Certain companies are required to appoint at least one woman Director on their Board, as per the Act. The Woman Director can be any type of Director, such as an Executive or Non-Executive Director.

Nominee Director: A Nominee Director is appointed by a shareholder or a lender who has a significant financial interest in the company. They represent the interests of the shareholder or lender who has nominated them.

Additional Director: An Additional Director is a Director appointed by the Board of Directors at a meeting of the Board of the company. The appointment of an Additional Director is temporary and must be confirmed by the shareholders of the company at a General Meeting.

Alternate Director: An Alternate Director is appointed by the Board of Directors to act in place of a Director who is absent for a period of time. The Alternate Director has the same powers and duties as the original Director during their absence.

 

Role of a Director

 

The role of a Director as per the Companies Act, 2013 is multi-faceted and crucial to the success and smooth functioning of the company. The Act sets out various provisions and obligations that Directors must fulfill, including:

Duty of care and diligence: Directors must act with reasonable care, skill, and diligence while performing their duties, exercise independent judgment, and act in good faith to promote the company's interests.

Fiduciary duty: Directors have a fiduciary duty towards the company and its shareholders, which requires them to act in the best interests of the company and avoid any conflict of interest.

Strategic decision-making: Directors are responsible for making strategic decisions, setting policies, and providing overall direction to the company.

Oversight and monitoring: Directors must oversee the management and operations of the company, monitor its financial performance, and ensure compliance with legal and regulatory requirements.

Appointment and remuneration: Directors are involved in the appointment and remuneration of senior management personnel and play a key role in succession planning.

Disclosure and transparency: Directors must ensure that the company maintains accurate and timely records, discloses relevant information to stakeholders, and maintains transparency in its dealings.

Overall, the role of a Director is to act in the best interests of the company, its shareholders, and other stakeholders, and to ensure that the company operates in a sustainable and responsible manner.

 

Documents Required

  • Resignation Letter: The Director must submit a Resignation Letter to the company, stating the reasons for their resignation and the effective date of resignation.
  • Board Resolution: The Board of Directors must pass a resolution to accept the resignation of the Director and record it in the minutes of the Board Meeting.
  • Intimation to Registrar of Companies: The company must file a Form DIR-12 with the Registrar of Companies within 30 days from the date of resignation, along with the following documents:

- Attachments to DIR-12

- Resignation Letter submitted by the Director

- Copy of Board Resolution accepting the resignation

- Copy of notice of the General Meeting, if any, where the resignation was discussed

- Copy of minutes of the Board Meeting recording the resignation

- SRN of DIR 11: The Director may file an e-Form DIR-11 with the Registrar of Companies within 30 days from the date of resignation.