A director either resigns, which takes effect when the notice is delivered, or is removed by the members, which needs special notice and an ordinary resolution. Resignation is a private arrangement between the director and the company; removal is a members' decision the board cannot resist if the procedure is followed. Removal stays under Section 169 of the Companies Act 2013, with the special notice rule in Section 115.
Before you start
- The articles of association — check whether any class rights or an entrenched clause touch on removal, and whether the articles authorise what you intend.
- Any shareholders' agreement or joint venture agreement — removal is often a reserved matter, and breaching the agreement creates a separate claim even if the resolution passes.
- The register of directors and key managerial personnel, so you know the current board and the minimum strength the company must keep (Section 149).
- For a public company, a company secretary or a practising company secretary to run the notice and the meeting.
- The director's DIN, because it does not disappear on removal and has to be kept tidy afterwards.
Steps
Route A — resignation (Section 168).
- The director gives notice in writing to the company. The resignation takes effect from the date stated in the notice, or the date it is received, whichever is later.
- The board takes note of it at the next meeting, and the register of directors is updated.
- File Form DIR-12 within thirty days recording the cessation, and keep the acknowledgement.
- Update the bank mandate and any other authority that rested on the director's signature, so the account is not left with an uncleared signatory.
Route B — removal by the members (Section 169).
- Members give special notice. Section 115 requires the members who intend to move the resolution to give the company notice of that intention at least fourteen days before the meeting. The notice goes to the company, not to the director.
- The company forwards the notice. On receipt, the company must send a copy of the notice to the director concerned (Section 169(3)).
- The director's right to be heard. The director may make written representations and require the company to circulate them to the members, and may also require them to be read out at the meeting (Sections 169(4) and 169(5)). This right is what a court looks at most closely, so do not skip it.
- Hold the general meeting. The board convenes the meeting and the members pass an ordinary resolution removing the director (Section 169(1)). No cause needs to be shown; the director is heard and then the votes decide.
- Note the one carve-out. A director appointed by the Tribunal, or one who holds office under a proportional representation clause, is outside the ordinary removal power. Everything else can be removed by ordinary resolution.
- Preserve the director's compensation rights. Removal does not take away the director's right to compensation or damages for the termination, if any is due (Section 170). Settling that separately avoids a later claim.
- File and replace. File DIR-12 within thirty days, update the register of directors and the statutory registers, and appoint a replacement so the board does not fall below the minimum strength. Recording the change is corporate compliance work, the appointment of a fresh director runs through company formation, and our corporate law practice acts if the removed director disputes the result.
Documents to keep
- The special notice and the director's representations, in the form in which they were given.
- The notice of the general meeting and the explanatory statement.
- The resolution and the signed minutes of the meeting.
- Form DIR-12 with the service request number, and the updated register of directors.
- The correspondence with the bank on the change of signatories.
What goes wrong
- Sending the special notice to the director instead of the company. The fourteen-day notice runs to the company; getting the recipient wrong can invalidate the meeting.
- The board refusing to put the resolution to the members. The board cannot block a validly noticed removal resolution; trying only strengthens the director's complaint.
- Denying the director the right to be heard. The right to make and circulate representations is the heart of Section 169, and skipping it is the commonest ground on which a removal is challenged.
- Treating a private company as if Section 169 applied exactly as written. The Ministry has notified exemptions for private companies, and the articles or a shareholders' agreement may provide a different mechanism, so check before you act.
- Forgetting the bank mandate. A removed director who still operates the company's account causes damage long after the resolution is passed.
- Confusing the office with the shareholding. Removal takes away the directorship, not the shares. A director who is also a shareholder keeps every share and every shareholder right.
Common questions
Can a director be removed without any reason?
Yes, in the ordinary route. Section 169 is a power to remove before the term expires by ordinary resolution, and no cause has to be established — but the notice, the representations and the meeting must all be done properly.
Does removal cancel the director's DIN?
No. The DIN is a lifelong identifier and remains with the person. The cessation is recorded against each company; the DIN itself only goes if the person is disqualified or acts in a way the law penalises.
What can the director do if the removal is disputed?
The director can challenge a procedural defect before the appropriate forum, and if the removal is part of a wider pattern of oppression or mismanagement, can approach the National Company Law Tribunal under Sections 241 and 242. The remedy is about the conduct, not about reversing the vote by itself.
What is the difference between resignation and removal?
Resignation is the director stepping down voluntarily, effective on delivery of the notice. Removal is the members ending the director's term against any wish to stay, and it carries the procedural protections in Section 169 precisely because it is not voluntary.
Removing a director is easy to get wrong on the notice and hard to undo afterwards. FileX Advocates & Legal Consultants, Kolkata, drafts the special notice, runs the general meeting and files the DIR-12, and answers the dispute if the director resists. Call +91 7439811422 or WhatsApp us before you put the resolution on paper.