Procedure for Resignation Of Director Of Company & Compliance
PROCESS OF RESIGNATION OF DIRECTOR UNDER COMPANY ACT- 2013
Section 168, the Companies Act, 2013: Resignation of directors
Corresponding sections of the Companies Act, 1956: None
This is a newly introduced section.
DIRECTORS RESIGNATION UNDER COMPANIES ACT, 2013:-.
1. The Director intending to resign shall send notice in writing to 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.
2. The director who has resigned shall be liable even after his resignation for the offences which occurred during his tenure.
3. The law has caste duty upon the Director Resigning, to File Form DIR- 11 (Company shall file form DIR 12) and
Mention therein the Reason for Resigning.
Enclose the copy of Notice sent to the Company.
Enclose Proof Of Dispatch.
File the said form within 30 days of resignation along with the prescribed filing fees.
There is warning note at the end of the form which states as follows:
Note: Attention is also drawn to provisions of Section 448 and 449 which provide for punishment for false statement and punishment for false evidence respectively. These sections 448 and 449 relate to punishment for committing fraud or giving false evidence and these are non-compoundable offences.
Duty of Company in case of Resignation by Director As per section 168 (1):
A director may resign from his office by giving a notice in writing to the company and the Board. The company shall on receipt of such notice;
Take note of the same by passing a board resolution to that effect and
As per Rule 15 of Companies (Appointment and Qualification of Directors) Rules, 2014 the company shall intimate the Registrar through Filing Of Form Dir.12 Within 30 Days From The Effective Date of Resignation on its website, if any.
Company is also required to Place the Fact of Such Resignation in the Report of Directors laid in the immediately following general meeting by the company.
Duty of Resigning Director in case of Resignation:
A director shall also forward a Copy of His Resignation Along With Detailed Reasons for the resignation to the Registrar within 30 (Thirty) days of resignation through filing of Form DIR.11 under his Digital Signature. It means it will be mandatory for all directors to have Digital Signature under Companies Act-2013.
Effective date of Resignation:
As per section 168 (2), 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.
SECRETARIAL PRACTICE:
As discussed above E-forms to be filed in case Resignation of Director are form DIR.11 and DIR.12.
Filing of Form DIR.11 is the responsibility of resigning director under his/her digital signature and
Whereas Filing of Form DIR.12 is the responsibility of Company.
Where all the directors of a company resign from their offices, or vacate their offices under section 167, the promoter or, in his absence, the Central Government shall appoint the required number of directors who shall hold office till the directors are appointed by the company in general meeting.
DIR – 11:
Enter the date of appointment of resigning director in the company.
In case of an alternate director, enter the DIN of the director to whom the appointee is alternate and click Pre-fill button. System will automatically display the name of the director to whom the appointee is alternate.
Enter the date of filing of resignation with the company and also effective date of resignation specified in the notice.
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. And the same effective date is required to be mentioned above.
The effective date of resignation shall be same as the date of cessation entered in eForm DIR-12 if already filed by the company.
It is mandatory to specify the reasons for resignation from the company.
Attachments: The following attachments are mandatory:
Notice of resignation filed with the company.
Proof of dispatch-{Attachment section of form DIR-11, asks for proof of dispatch. Now the question is — Is there any requirement of formal dispatch through post which generates proof of dispatch? My Answer is “NO”. We can very well use scan copy of “Receiving” of resignation letter given by responsible official of the company in case of personal delivery. Further scan copy of printout of E-mail through which resignation tendered would be enough as proof of dispatch}.
Acknowledgement received from company, if any and is mandatory if yes selected in option at serial no 6. {Point no. 6 in form DIR-11 inquires whether confirmation is received from the company w.r.t. the resignation of Director. As per my understanding if we mention “NO” in the E-form, there will be no issue in future as confirmation of resignation from company is not mandatory u/s 168.
When a director files eForm DIR-11 for intimating about his resignation before the company files eForm DIR-12, an email will be sent to the company for filing the eForm DIR-12 and the status of the Director in the company will be changed to ‘Resigned’ against the selected designation. Once the company files the relevant eForm DIR-12, the status shall be changed as per the existing system.
We can use Board Resolution for taking note of resignation or Resignation acceptance Letter by the Company as Evidence of Cessation. Further Resignation Letter given by the Director shall act as Notice of Resignation filed with the Company. I sincerely believe that above article would be of some help for understanding.
DRAFTS
DOCUMENT FORMATS REGARDING RESIGNATION OF DIRECTOR
Please find below sample formats of relevant documents required for resignation of Director:
1. Sample Resignation Letter
Date:
To
The Board of Directors,
ABC Private Limited
Address
Sub: Resignation from the position of Director
Dear Sir/Madam,
Due to personal and unavoidable circumstances, I hereby tender my resignation from the Directorship of the Compan
y with immediate effect. Kindly accept this letter as my resignation with immediate effect, from the post of Director of ABC Private Limited, and relieve me of my duties.
Kindly acknowledge the receipt of this resignation letter and arrange to submit the necessary forms with the office of the Registrar of Companies, NCT of Delhi and Haryana to that effect.
Thanking You
Yours sincerely,
(XXXXX)
Address:
DIN No.:
————————————
2. Resignation acceptance Letter by the Company
To, Dated:
Mr. XXXXX
Address:
Subject: Acknowledgement of Resignation
Dear Sir,
This has reference to your resignation letter dated _________. In this regard, please be informed that, the Board of Directors have approved your resignation w.e.f. __________, in the duly held Board meeting dated _______________.
The Board sincerely appreciated your association with the Company and the support which you have rendered during your tenure. We would like to wish you all the best with respect to your future.
Thanking you,
Yours Faithfully
For ABC Private Limited
(YYYYYYY)
Director
DIN:
————————
3. Board Resolution for taking note of resignation
CERTIFIED TRUE COPY OF THE RESOLUTION PASSED AT THE MEETING OF THE BOARD OF DIRECTORS OF ABC PRIVATE LIMITED HELD ON _______________AT 03.00 P.M. AT ________________________________
RESIGNATION OF MR. MOHIT CHAUHAN AS DIRECTOR
“RESOLVED THAT resignation of Mr. Mohit Chauhan as Director, from the Board of Directors of the Company, be and is hereby accepted with effect from _________________.
FURTHER RESOLVED THAT for the purpose of giving effect to this resolution, Mr. Rakesh Singh, Director of the Company be and is hereby authorised to do all acts, deeds, matters and things as deem necessary, proper or desirable and to sign and execute all necessary documents, applications and returns along with filing of necessary E-form with the Registrar of Companies, NCT of Delhi and Haryana.”
Certified True Copy
For ABC Private Limited
(YYYYYY)
Director
Address:
DIN:
I am very hopeful that this write up would be of some help to understand the concepts in new Companies Act, 2013.
(Author is a Company Secretary in Practice from Delhi and can be contacted at [email protected] for suggestion, Comment and Queries )