The companies act have now provided directors of the company with an easy exit option which was not possible before. The process for resignation has now been made unilateral and is instrumental in case of resignation where the companies act of 95 was ambiguous.
Director is appointed by the shareholder of the company so that they can manage the operations of the company. The company act is clear on the duties and liabilities of directors of the company whether they are managing directors, executive directors or independent director of the company.
The directors that intend to resign from the Director position need to submit the following :
The director is under obligation to send the resignation letter in writing to the company. Once the notice is sent to the board or the shareholder of the company the directors are recommended to file Form DIR -11.
NOTE: In case the director of the company is dealing with disputed matter they have to file DIR 11 mandatorily
If the director conveys about his resignation verbally in a general meeting and the same is accepted in the same meeting, it is effective and valid.
Any foreign director can authorise a specified person to execute and file Form DIR-11; the director is under no obligation to sign the form himself. The authorised person selected can be company secretary or any of the resident director of the company.
Once the company has received a notice of resignation from the director they have to complete the following obligations:
Following Documents are Mandatory in Case of resignation of a director:
The resignation of the director will be effective from the date the company receives the notice of the resignation from the director of the company or if any date that is mentioned by the director in the notice.
A director of the company is liable for all the If any of the offences are incurred in the tenure of the director then he will be responsible for such offences even after his or her resignation.
The shareholder agreement given to the director determines whether the director of the company will have to transfer his shares post-resignation. If the MOA and AOA of the company are silent on the matter, it is entirely upto the director.
If the director of the company decides to keep his shares after resignation, he will become a shareholder of the company post-resignation.
As per the companies act 2013 the resignation of a director is also not subject to acceptance of board although as per the current practice, the directors are provided with terms of appointment where the power of the managing director is mentioned.
A whole -time director or managing director resignation must be done with a proper board meeting, and hence resignation cannot happen by way of circulation of resolution.
If all the directors of the company resign at the same time the promoters of the company or in absence of promoters the central government has authority to appoint directors for the company.